Retirement savings reliefs: KWSP, PRS, life insurance and zakat rebate (YA 2026)

Quick summary

Your retirement savings can reduce tax through reliefs (deducted from chargeable income) and rebates (deducted from tax payable):

Item	Type	Amount (YA 2025 — latest published)
KWSP contributions / approved schemes	Relief	up to RM4,000 (restricted)
Life insurance / takaful premiums / additional voluntary KWSP contributions	Relief	up to RM3,000 (restricted)
Combined limit KWSP + life insurance	Relief	RM7,000 (restricted)
PRS (Private Retirement Scheme) & deferred annuities	Relief	up to RM3,000 (restricted)
Zakat / fitrah	Rebate	up to the amount of tax payable
Rebate chargeable income < RM35,000	Rebate	up to RM400 (spouse: up to RM800 in certain cases)

KWSP and life insurance relief (G17)

In the Form BE Explanatory Notes, this relief is known as G17 — Life insurance and KWSP:

• Life insurance premiums / takaful contributions / additional voluntary contributions to KWSP [paragraph 49(1)(a) of the Income Tax Act 1967]: up to RM3,000 (restricted).
• Contributions to approved schemes (e.g. KWSP) / voluntary KWSP contributions (NOT including private retirement schemes) / contributions under written law [paragraph 49(1)(b)/(c)]: up to RM4,000 (restricted).
• Overall combined limit: RM7,000 (restricted).

Important note: Life insurance premiums on policies that insure a child's life are not allowed as a G17 deduction.

Source: HASiL — Tax Reliefs (Year of Assessment 2025 tab); Form BE Explanatory Notes (pages 28–30); Income Tax Act 1967 (see the Official Sources section).

PRS and deferred annuity relief (G18)

Private Retirement Scheme (PRS/SPS) and deferred annuities:

• Deduction not exceeding RM3,000 for total contributions to SPS (approved by the Securities Commission) + deferred annuity premiums.
• In effect for YA 2025 to 2030.
• Joint assessment: the RM3,000 limit is combined.

Source: Form BE Explanatory Notes (page 30); Income Tax Act 1967 (subsections 49(1D), 49(1E), 49(3), 50(2), 50(3)); Public Ruling No. 4/2014 (Deferred Annuities); Public Ruling No. 9/2021 (SPS).

Zakat and fitrah rebate

Payments of zakat or fitrah in the basis year qualify as a rebate — they are deducted directly from tax payable (not from income). The maximum zakat/fitrah rebate amount is subject to the amount of tax charged.

Source: HASiL — Rebate; Form BE Explanatory Notes (subsection 6A(3) of the Income Tax Act 1967).

RM400 income tax rebate

Individuals with chargeable income of less than RM35,000 qualify for the income tax rebate (official schedule: separate/joint assessments up to RM400 for each husband/wife; maximum RM800 in certain cases — refer to HASiL's Rebate page for the full schedule). The RM400 rebate for YA 2026 is subject to annual review — this item still awaits official confirmation from HASiL — check again with HASiL before deciding.

Source: HASiL — Rebate.

Supporting documents

Keep the following documents with your tax records (for at least 7 years):

• Zakat receipts (for the zakat rebate).
• KWSP statements (for mandatory/voluntary contributions).
• Life insurance or takaful policy/premiums.
• PRS / deferred annuity statements.
• Worksheet HK-14 in the Form BE Explanatory Notes.

Simple example

Ariff, a salaried employee, contributes to KWSP and holds a life insurance policy. His total KWSP contributions + insurance premiums are within the RM7,000 combined limit. He also contributes to PRS up to the RM3,000 limit, and pays zakat on his income. When filing e-BE, he claims G17 and G18 reliefs, and the zakat rebate is deducted directly from his tax payable. (Illustrative example — not specific tax advice.)

Frequently Asked Questions (FAQ)

Q. Can I claim KWSP and life insurance exceeding RM7,000? A. The overall combined limit is RM7,000 (restricted) — amounts above the limit are not allowed. This item still awaits official confirmation from HASiL — check again with HASiL before deciding. for YA 2026 verification.

Q. What is the difference between additional voluntary contributions and ordinary voluntary KWSP contributions? A. Additional voluntary contributions fall under the RM3,000 category (paragraph 49(1)(a)); ordinary voluntary contributions fall under the RM4,000 category (paragraph 49(1)(b)). The Form BE Explanatory Notes give official examples of both. This item still awaits official confirmation from HASiL — check again with HASiL before deciding. for full details.

Q. Can life insurance premiums for a child be claimed? A. No — premiums on policies that insure a child's life are not allowed as a G17 deduction.

Q. My zakat is larger than my tax — what happens? A. The zakat/fitrah rebate is limited to the amount of tax payable — the balance is not refunded.

Glossary

• Relief — a deduction from chargeable income before tax is calculated.
• Rebate — a direct deduction from tax payable.
• KWSP — Kumpulan Wang Simpanan Pekerja (Employees Provident Fund).
• PRS / SPS — Private Retirement Scheme (approved by the Securities Commission).
• Deferred annuity — a retirement product that provides periodic income later.
• G17 / G18 — relief codes in Form BE.
• HK-14 — Worksheet in the Form BE Explanatory Notes.