PPA welcomes zero tax penalty for housing, healthcare withdrawals

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17 October, KUALA LUMPUR – The Private Pension Administrator Malaysia (PPA) lauds the government’s move to allow Private Retirement Scheme (PRS) members to make pre-retirement withdrawals for healthcare and housing purposes without having to pay any tax penalty.

Chief executive officer Husaini Hussin said under the 2020 Budget, the government introduced the zero per cent tax penalty for pre-retirement withdrawals from PRS’ sub-account B — which holds 30 per cent of the savings — for healthcare and housing purposes.

“The move reflects the government’s understanding and commitment to help all Malaysians by allowing them to use a portion of their retirement savings for their needs,” he said in a statement today.

Husaini said in recognition of the rising healthcare costs, the government also allowed for PRS withdrawals for immediate family members.

Introduced in 2012, the PRS is a voluntary savings scheme for Malaysians aged 18 years old and above to help them to save for their retirement.

“As an added incentive, individual contributions to PRS are eligible for tax relief of up to RM3000 per annum,” he said.

Employers could also make contributions to their employees’ PRS savings, and may claim tax deductions from their business income based on the contributions made on behalf of their employees.

Members who have reached the retirement age of 55 or those who suffer from permanent total disablement, serious disease or mental disability can withdraw their entire PRS savings without being subjected to any tax penalty.

For any information, log on to its website at www.ppa.my or call 1300-131-772.

– BERNAMA

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