Payroll Malaysia: Key Tax Relief Updates for the Year 2026 (TP1 & TP3)

Key Tax Relief Updates for the Year Assessment 2026 (Effective January 2026 Payroll)

Malaysia’s Budget 2026 introduces several updates to personal income tax reliefs, effective from January 2026 payroll onwards. These updates affect tax declarations under TP1 and TP3 forms, providing increased relief limits and expanded eligibility to better support taxpayers.

This article summarises the key tax relief changes and form updates you need to be aware of to ensure accurate payroll and tax reporting.

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Summary of Tax Relief Changes

1. Medical Treatment Expenses For Children With Learning Disabilities (Aged 18 and Below)

What's New?
The tax relief limit has increased from RM 6,000 to RM 10,000 for expenses related to:

• Assessment
• Diagnosis
• Early intervention programmes
• Rehabilitation treatment

for children with learning disabilities aged 18 years and below.

Important Notes:

• Official receipts must support claims
• A certificate from an allied health professional is required to confirm participation in early intervention or rehabilitation programmes.

Relief Cap: RM 10,000 (previously RM 6,000)

2. Domestic Tourism Expenses

What's New?
Tax relief of up to RM 1,000 has been reintroduced for:

• Entrance fees to local tourist attractions such as museums, theme parks, national parks, marine parks, wildlife parks, zoos and geoparks, and
• Art and cultural programmes within Malaysia, such as handicrafts, Batik, People's Theatre and Traditional Dance Workshops

Relief Cap: RM 1,000.

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Changes to Tax Relief Scope

1. Child Care Centre Expenses for Children Aged 12 and Below

What's New?
The eligible age for child care relief has been extended:

• From 6 years old
• To 12 years old

Child care centres must be registered with the government.

Relief Cap: Unchanged (Remains up to RM 3,000)

2. Relief for EV Charging Facilities, Food Waste Composting Machines & CCTV Installation

What's New?
The scope of this relief has been expanded to include:

• Purchase and installation of CCTV systems for household use.
  

Claim Frequency: Once every 2 Years of Assessment.

Relief Cap: Unchanged (Remains up to RM 2,500)

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Updated Tax Relief Forms (TP1 & TP3)

To reflect the Budget 2026 changes, taxpayers and employers should use the updated form below:

 

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