You might be awared that the National Education Savings Scheme (Skim Simpanan Pendidikan Nasional, SSPN-i) setup by the National Higher Education Fund Corporation (Perbadanan Tabung Pendidikan Tinggi Nasional, PTPTN) for the purpose of higher education is able to provide you personal income tax saving, which is one of the good personal finance means for resident individuals to reduce their payable income tax.
The maximum amount of personal income tax relief for new saving deposits placed in SSPN-i for the benefit of your children during each year of assessment is RM3,000. This mean if your children's SSPN-i account is deposited with RM3,000 additional savings (new deposit - withdrawal = RM3,000) in the year, you can deduct your taxable income for the year by the same amount of RM3,000.
If the additional savings during the year is less than RM3,000, you can deduct your taxable income for the year by the same amount, which is less than RM3,000.
If the additional savings during the year is more than RM3,000, you can deduct your taxable income for the year by RM3,000 only, as RM3,000 is the maximum.
However, National Budget 2013 had announced that this maximum amount of SSPN-i tax relief be doubled to RM6,000 for a period of 6 years from assessment year 2012 until 2017. The maximum amount will fall back to RM3,000 after 2017.
Now, the good news is, National Budget 2018 announced on 27 October 2017 has further extended this SSPN-i maximum RM6,000 tax relief period for another 3 years, which will continue from assessment year 2018 until 2020.
This means that the maximum tax relief from SSPN-i new deposits will remain as RM6,000 until assessment year 2020.
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