Many people have this misconception in mind:

Let say you deposited MYR 6,000.00 into SSPN-I on 31st of Dec 2017. Your tax rate is 24.5%. You get instant MYR 1,470.00 tax relief... yay

On 2nd Jan 2018, you withdraw RM 6,000.00 from SSPN-I, thinking you get an instant gratification of MYR 1,470.00 right?

Yes and No.

Yes, if this is the only time you want to get the tax relief and have no intention to get the 2018 tax relief in future.

No, if you want to get also the 2018 tax relief.

How so?

So, in 2018, let's say you repeat the same process, that is to say, you deposited another MYR 6,000.00 on 31st Dec 2018 hoping to withdraw again the MYR 6,000.00 and get the tax relief.

Sorry, to tell you, you will get zero tax relief.

How so? The calculation is as such:

Jumlah deposit pada tahun 2018 di tolak dengan jumlah pengeluaran di tahun 2018:

MYR 6,000.00 deposited on 31st Dec 2018 minus MYR 6,000.00 withdrew on 1st of Jan 2018 = MYR 0.00

MYR 0.00 x 24.5% = MYR 0.00 tax relief for 2018.

Get it?

Xuzen

I thought the relief is given to tabungan bersih = net saving; i.e fresh fund.

They calculate in such manner?

Whats stopping you from depositing 12k in Dec 2018 for 1 month? And get the tax relief yet again.

It's a PRS. Not EPF.

Consider these few scenarios:

A)
1/1/2017 withdrew RM 6,000.00
31/12/2017 deposit RM 12,000.00
Tax relief = RM 12,000.00 minus RM 6,000.00 = RM 6,000.00 x 24.5% = RM 1,470.00

Compare with

B)
1/1/2017 withdrew RM 0.00
31/12/2017 deposit RM 6,000.00
Tax relief = RM 6,000.00 minus RM 0.00 = RM 6,000.00 x 24.5% = RM 1,470.00

Compare with

C)
1/1/2017 withdrew RM 0.00
31/12/2017 deposit RM 6,500.00
Tax relief = RM 6,500.00 minus RM 0.00 = RM 6,000.00 x 24.5% = RM 1,470.00

Compare with

D)
1/1/2017 withdrew RM 6,000.00
31/12/2017 deposit RM 12,500.00
Tax relief = RM 12,500.00 minus RM 6,000.00 = RM 6,000.00 x 24.5% = RM 1,470.00

*** Tax relief amount cap at RM 6,000.00 max ***

You see that either (A), (B), © or (D) will yield the same tax relief amount.

Hence nothing to stop you from depositing RM 12,000.00 or RM 24,000.00 or even RM 1,000,000.00. The calculation is still the same.

Xuzen

This post has been edited by xuzen: Jan 11 2018, 06:03 PM

Um.. what are you going on about?

My RM12k was in reply to your long post about proving we get 0 tax relief in 2018 if withdrew blah blah...

THen You suddenly start positing this which is totally irrelevant bro...

You pusing until I also blur...

This post has been edited by MeToo: Jan 11 2018, 06:43 PM

He's showing you how if you make withdrawal, you get zero tax relief.

so there is an element of diminishing return...
yr1: 1470 / 6000
yr2: 1470 /12000
yr3: 1470 /18000

Ilmu kira - kira kawan kurang tepat.

Pada pendapat saya:
yr1: ( 1470 x 1 ) / 6000
yr2: ( 1470 x 2 ) /12000
yr3: ( 1470 x 3 ) /18000

Baru tepat.

Xuzen

This post has been edited by xuzen: Jan 11 2018, 10:16 PM

Don't understand why need to multiply...
I'm thinking on the scenario of place 1month only purely for tax savings...then withdraw all.
Money saved / money movement

By the way...we're OT.

Sorry mod!

Which I replied succinctly that the "problem" would be solved by depositing 12k the very next year.

You understand my goal.

While I'm also clueless at xuzen calculation

this simplified it.....
https://forum.lowyat.net/topic/1819492/+920

I am writing to for the general forumers to inform them that they cannot "play" with the system thinking they can rigged it.

Basic line is, if you want to max your tax relief, you need to add fresh RM 6,000.00 into the scheme. You cannot recycle your RM 6,000.00 hoping to get multiple times your tax relief.

p/s

There was two years that due to their system, you get free lunch, that is the system recognise your dividend as also contribution. I remember that the two years to be 2014 & 2015. Later, they realised that mistake and now that free lunch is no longer available.

Xuzen

All you need to do is just to show a 6000 NETT positive contribution for the year. So just top up additional 6k ontop of what you withdrew early in the year.

What's the problem... its STILL a good ROI

Correct... net contribution is used for calculating the tax relief.

I use a more " cheong - hei " approach because I am writing for a greater audience, not just for your good self.

how long it takes the bank to create the PPA ID upon payment made?

hi,

would like to know the next cycle of government youth incentive credit into account.

put in 1k on September 2017.

thanks

quote from forumer MUM as below means april only will get?

"When will get the incentive from government?"
from previous postings by forummers....the cut off date is end June and Dec......then 4 months after the cut off date you will be informed and yr a/c will be updated. Btw, the RM1,000 incentive will be utilized to purchase units which will be created in sub-account A of the PRS fund.
"And to qualify for next year youth incentive again, I need to top up 1k after 1/1/18?"
The incentive is a one-off incentive which will only be received once for the entire program between 2014 to 2018 and not once every year.

for more info of this PRS things...try this FAQs
https://www.ppa.my/prs-youth/prs-youth-faqs/
http://www.publicmutual.com.my/prs/PRSYouth.aspx
https://www.fundsupermart.com.my/main/resea...ve-RM1,000-4558

you can only receive once per person

You can only get it once. Keep in mind there's allocation of RM160m