LHDN Tax Tip - Lembaga Hasil dan Negeri - PRS Private Retirement Scheme Claims, maximum claim up to RM 3000
One of the ways to claim back some tax relief is to claim from investing in private retirement scheme (PRS). PRS was introduced by the government as an alternative way for people who want to build their own retirement nest to put money into mutual fund companies in Malaysia. The money will not be able to be withdrawn until age 55, early withdrawal will incur some penalties.
Tips to make this claim :
- Set calendar up to do lump sum payment
- Set reminder on calendar to make this claim during tax reporting season (January-April)
I usually set up my calendar in 4 quarters of the year to do lump sum. Sometimes when the market goes down I will put in some money into PRS. PRS buying strategy should not be lump sum style and it should be purchased over a time.
I missed to claim this item for 1 year and hence I wrote this blog post as a reminder to do the claims.
So far, the easiest way to buy PRS funds is via Fundsupermart as they sell PRS funds from various mutual funds/unit trust companies. They sometimes have promotions on PRS funds from time to time.
Do note that PRS funds are considered mutual funds/unit trusts and hence the risks could be higher than EPF scheme. If you are a risk averse person, do consider taking up PRS funds that are low risk like PRS Income Funds and Conservative Funds.
The location to in the LHDN form (Borang BE) to claim PRS tax relief is :
“Skim persaraan swasta dan anuiti tertangguh”
Not very descriptive and no mention of the word PRS. The maximum claim is RM3,000, so if you're calculative, just make sure you only deposit in RM3,000 into PRS each year, more than that you can't claim the excess from LHDN.
❓Commonly asked question
Can I invest in multiple PRS funds from different fund providers (eg Public Mutual, HwangDBS)?
Yes you can and whatever you invested can be seen from a consolidate view at PRS.my All funds PRS funds bought from various unit trust companies will appear on this site.
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