Kuala Lumpur:The individual tax relief limit has been increased to RM12,000 from RM9,000, benefiting Malaysia's middle-income group, known as M40, according to Prime Minister Datuk Seri Anwar Ibrahim.

According to BERNAMA News Agency, Prime Minister Anwar, who also serves as the Finance Minister, announced a reduction in the tax rate for individual residents by one percentage point. The taxable income band from RM70,000 to RM100,000 will now be taxed at 18 percent, while the band from RM100,000 to RM150,000 will be reduced to 24 percent. These changes were presented during the Budget 2027 announcement in the Dewan Rakyat.

The budget also introduces various individual tax reliefs, such as expanded medical treatment coverage that now includes postnatal care, as well as care for parents and grandparents covering all related expenses. The exemptions further extend to sports equipment, such as the purchase of sports shoes, tuition fees, and skills training across all fields of study, including children's tuition.

Additionally, the lifestyle exemption has been broadened to cover subscriptions to artificial intelligence (AI), vaccination costs, and the adoption of pets from registered centers.

The government is also implementing a progressive approach by adjusting the tax rate for high-income individuals earning above RM1 million to 30 percent. This comprehensive set of measures is expected to provide an additional disposable income of up to RM1,600 to approximately five million taxpayers in the country.