Disclaimer : I am NOT a qualified tax advisor, this is solely based on my research and experience! You should not believe what a total stranger tells you, do your own research & listen to the government, :D
Haven't Heard of "Leverage" Yet !??
Leverage is the ability to do MORE with LESS
To fully understand what I am going to share with you,
You need to read or re-read my previous post, so that you will benefit from it
Again, I am here to share my short experience during housemanship, so my focus will always be and always will, in the point of view AS A HOUSEMAN. However, since we all have a medical degree, please use your creativity, this can be universal once you get the whole idea, if you're a medical officer or specialist (hopefully my boss don't read this, lol), think hard, you be amazed on how much money you've DONATED to the government legally and unnecessarily all these years !!!
To understand this concept, although its not a rocket science, it is just that nobody care to share it with you or medical field related profession just don't care (I bet my money on the latter), you need to master 3 things only !!
1 . How to calculate your Taxable Income
2 . The difference between Relief and Rebate
3 . Simple Primary School Mathematics
Houseman's Income Tax, for 2013
You all did not start housemanship on the same day, so your income can be different from this due to several reason (eg : annual income increment, bonuses, back-dated salary payment, bla bla bla). I have calculated based on a houseman payslip.
** This is an actual screenshot, on how i keep my record, its practical & easy
So, the total gross income, for year assessment 2013, is RM 65,063.27 (kaya meh this houseman? )
by applying the "tax bracket", the taxable income should look like below :-
** note that the arrow shows gross total income, before and after, minus the relief by LHDN
** the red box shows the tax you need to PAY, before and after, minus the relief
You save almost 50% legally in tax right ?? So what lesson can be learnt here ??
Sure you won't think, because you know i will tell you, right... haizzz...
Le$$on #1 : the more relief you use, the lesser the tax !!
- This is possible because "relief" is design to REDUCE your total income, so less money will end up in the "higher bracket", thus reducing the tax
- In the above case, note that the bracket 19%, is zero on the right side !!
Le$$on #2 : we can aim our income to stop at 7% bracket
- How is this possible? Yes, more or less, houseman income tax looks like this. But the above example, i only use relief which are :-
1) self relief (-9000)
2) EPF (-6000) ** this total up RM 16,000, note that on the left, money in
3) Books (-1000) bracket 19% is only RM 15,067.27 , will be nil after relief !!
- To aim for bracket 7%, how much relief do you need, to wipe off the 12% bracket ??
Yes, depends on the money inside bracket 12% lohh !! Which is about 14k, right ??
- Any more relief you can use? Sure, several of them !! Check LHDN website.
Le$$on #3 : rich people has tons of relief / loophole
- That is why, the rich stays rich and gets richer !!
- They leverage on tax, they have alot of relief given through their company or corporation (not as individual), while they make more profit, they pay less taxes !!
- Make sense or not ??? Now you wonder why they get richer day by day
- Of course this is only one strategy and considered as "small" for them
It's like, either you pay higher tax to the government (of course they will use it wisely)
or
Use RM 1000 of your money (throughout one whole year) to buy books, get to own the knowledge and income tax relief at the same time !!
Save your hard-earned money, unless if you love "kangkung" so much !! Mari.. Mari...!!
p/s : some strategy to pay less tax legally, i can't share it here, the government doesn't like it, there is even rules to make sure this "strategy" doesn't circulate to the public. Never mind lah, just pay only, we love our country, it is peaceful, no corruption, we are the best in Asia lorr !!
