Guidelines on serious disease for the purpose of Section 46(1)(g) of Income Tax Act 1967

[Deduction of medical expenses for taxpayer, spouse and children suffering from a serious disease]

The Inland Revenue Board (IRB) has on 4 May 2011 issued Guidelines on serious disease for the purpose of claiming relief under Section 46(1)(g) of the ITA.

With effect from year of assessment 2001, a taxpayer may claim relief of not more than RM5,000 on medical expenses expended on himself, his spouse and children for serious diseases suffered.

Serious disease is defined in section 46(2) of ITA to include “acquired immunity deficiency syndrome, Parkinson’s disease, cancer, renal failure, leukaemia, and other similar diseases.” The Guidelines elaborate that serious diseases are acute and chronic illnesses that cannot be cured and require prolonged medical treatment. Some of the characteristics of serious illnesses include life threatening, continuous and high cost of medical treatment, acute medical illnesses that requiring hospitalisation, etc. Appendix A of the Guidelines provides a list of the types of serious diseases. This list is similar to the list of serious/chronic diseases for the purposes of Section 44(6) with additional diseases (items 14-19).

A claim of relief must be supported by a receipt and a letter of certification by a doctor registered with the Malaysian Medical Council. The name and income tax file reference number of the claimant must be indicated on the back of the receipt and kept for tax audit purposes. The IRB will review the final report of the diagnosis to verify the serious disease suffered. Provisional diagnosis from a registered medical practitioner will not be considered as the letter of certification. Symptoms stated in the medical report will not be considered.

Paragraph 4 of the Guidelines provides a list of other circumstances that may be considered for the claim for relief under Section 46(1)(g) of ITA

(i) Cost of medical treatment for accident victim with a serious injury that is life threatening;

(ii) Cost of surgery or amputation treatment for burns due to a serious accident which may result in death or loss of limbs,

(iii) As loss of limbs is given a relief on basic supporting equipment under section 46(1)(d) of ITA, it is not eligible for relief under section 46(1)(g) of the ITA. However, the cost of initial medical expenses resulting in the loss of limbs is eligible for relief under section 46(1)(g) of the ITA.

(iv) In specific cases, some serious diseases which are not listed in Appendix A can be considered for section 46(1)(g) relief upon recommendation of a registered medical expert, subject to the actual expenses incurred. Taxpayers may apply to the IRB Branch where his/her income tax returns are maintained to be eligible for the relief.

Members may view the guidelines at the website of the Institute at Guidelines on serious disease for the purposes of Section 46(1)(g)