October 25, 2009

Updates: Do We Lose Out in Budget 2010?

Let's revisit some of the Budget 2010 goodies that were announced last Friday that have direct financial impact on the working population:
  • Increased personal tax relief from RM8,000 to RM9,000
  • Reduction of maximum tax rate from 27% to 26% for chargeable income of RM100k or more
  • Broadband subscription fee tax relief of up to RM500
  • Service charge of RM50 per credit/charge card and RM25 per supplementary card
  • RPGT tax of 5% for property disposition

Assuming that most of us have taxable income in the tax bracket of 19%, this is what we are going to save based on Budget 2010:

Savings = RM1,000 (personal tax relief) + RM500 (broadband subscription)
                = RM1,500 x 19%
                = RM285

So, we save RM285 for tax payment in 2011. Now let's look at the next point of service charge for credit cards. Assuming that we have on average 3 principal credit cards per person:

Extra tax incurred = RM50 x 3
                                   = RM 150

Total savings = RM285 - RM150
                          = RM135

So, if you have more than 6 credit card collections, you can then kiss your savings goodbye.

If you do have properties to dispose off next year, I'm pretty sure you will have to fork out more in 2011 in tax payment due to re-introduction of RPGT of 5%.


giko said...

The RM1K increase for EPF/insurance only applies to annuity policies and if you don't have one, then you can't utilise the RM1K.

jutamind said...

yes, i do read that the 1k extra applies to annuity policies, but there seems to be some conflicting news on this. will probably wait for official elaboration from IRB.

Related Posts Plugin for WordPress, Blogger...