Most resident taxpayers will see changes to their personal income tax from year of assessment 2027 under Budget 2027, which was tabled on 9 October.
The individual relief, which every resident taxpayer can claim, rises from RM9,000 to RM12,000. Income between RM70,001 and RM100,000 will be taxed at 18% instead of 19%, and income between RM100,001 and RM150,000 at 24% instead of 25%. At the top end, the rate for chargeable income between RM1,000,001 and RM2,000,000 rises from 28% to 30%.
EY estimates that the changes, together with other personal reliefs, could add up to RM1,600 to the disposable income of about five million taxpayers.
Reliefs that are being widened
- Medical expenses for yourself, your spouse or your child: up to RM10,000, now including postnatal care (up to RM3,000) and breastfeeding equipment (up to RM1,000).
- Lifestyle: up to RM2,500, now covering AI software subscriptions and pet adoption costs.
- Medical, dental, special needs and carer expenses for parents or grandparents: up to RM8,000.
- Education and skills course fees: up to RM7,000.
- Sports equipment and activities: up to RM1,000, now including sports shoes of up to RM300.
- Domestic tourism: RM1,000, extended to year of assessment 2027.
Keep your receipts
Reliefs must be supported by receipts and documents if the Inland Revenue Board asks for them. The changes also take effect only after the Finance Bill is passed, so check the final rules before you file your 2027 return.
Sources
KPMG Malaysia: Budget 2027 Snapshot
EY Malaysia: Budget 2027 press release (9 Oct 2026)