Date of Issue : February 4, 1998

  These guidelines serve to explain the various criteria applied with regard to claims for tax deduction under Section 49(1B) of the Income Tax Act, 1967. Section 49(1B) was introduced from the year of assessment 1996 to provide for a further deduction of an amount not exceeding RM2,000 on premiums paid for any insurance on education or medical benefits in respect of an individual, his wife or child.

  A certified true copy of the insurance premium receipt must be submitted with the Return Form every year. A copy of the insurance policy must be submitted when making a claim for the first time.


To qualify as an education policy and a medical policy for the purpose of Section 49(1B) and subsection 49(4), Income Tax Act, 1967, the following criteria will have to be satisfied :

3.1 Education Policy

i. The beneficiary should be the child;

ii. The insured can be the parent or the child :

Where the parent is the insured

Where the insured is the parent, the child must be the nominee.

Where the child is the insured

a. Where the insured is the child, a payor benefit rider is compulsory, which means that the life of the person paying the premium i.e. the parent must also be covered. On the death of the parent, all future premiums are assumed to have been paid in full.



This report is reproduced with permission from Kassim Chan Tax Services Sdn Bhd (36421-T) and Deloitte Touche Tohmatsu Tax Services Sdn Bhd (151497-P). 7th Floor, 3 Cangkat Raja Chulan 50200 Kuala Lumpur, Malaysia or P.O.Box 11151, 50736 Kuala Lumpur, Malaysia.
Telephone: (603) 232 0711, Facsimile: (603) 2304746, (603) 230 0585

No part of this report may be reproduced in any form without the prior consent of Kassim Chan Tax Services Sdn Bhd and Deloitte Touche Tohmatsu Tax Services Sdn Bhd.

Another Malaysian resource site designed and hosted by MIR Communications Sdn Bhd.