In the 2014 Budget tabled on 25 October 2013, the Prime Minister had announced an incentive of RM500 to contributors who participate in the PRS scheme to inculcate the importance of savings from an early age. The RM500 is a one-off contribution by the Government to young PRS members (aged between 20-30) to encourage youths to undertake long-term savings for retirement through the PRS.
The Government will contribute RM500 per qualified person to be used to purchase units of PRS funds in the PRS account of youths, whom have accumulated a minimum gross contribution amount of RM1,000 within a year. This incentive will be made available for a period of 5 years from 2014 to 2018.
RM3000 Tax Relief
As announced in Budget 2012, an individual is eligible to have a Tax relief up to RM3,000 per annum. The individual tax relief is applicable on gross contribution, i.e. inclusive of upfront charges.
For example, if an individual invested RM3,000 with a Provider and that Provider deducted RM10 for account opening fee, and RM50 for sales charge, the full RM3,000 is eligible for tax relief, and not RM2,940.
Tax relief of up to RM3,000 per annum will be applied on taxable income, for individual contributions made to the PRS for the first 10 years from assessment year 2012. Individuals may claim their individual tax relief for the PRS under Section F-F18 of the BE Form, which can be located at the Lembaga Hasil Dalam Negeri Malaysia (LHDNM) website at www.hasil.gov.my
Contribution statements to support the claim for tax relief may be obtained from the Provider as proof of investment made for the year of assessment.