It’s another 2 weeks to go before the year closes. If you are thinking of ways on how to maximise your income tax exemptions so that you can save on tax payable during the assessment happening next April, now’s a good time to do so. In the remaining two weeks, here’s what you can do if you have not already maxed out your allowed exemptions.

• Buy more books and magazines from major bookstores like MPH, Borders, Kinokuniya and Times Book Store. Be sure to keep those receipts.

• Donate to charity and remember to ask for a receipt for your kind contribution. Take note that you need to make your donations to charities that are sanctioned by the government in order for your receipt of donation to be considered legitimate.

• Purchase insurance for yourself. However, bear in mind that the exemption on this item is shared with your EPF contribution up to a maximum of RM6,000. So if you EPF contribution is already maxing out this category of exemption, you may not benefit much. Nevertheless, an insurance policy is still a good investment to take upon yourself.

• Take up a study course that helps you in your job to improve and enhance your knowledge. Make sure that you find out which institutions are approved by the government if you are taking advantage of this.

• If you are buying any sport equipment like a racket or even a threadmill, hold on to that receipt because you will get some exemption from it too.

• If you have kids, take up an insurance policy or an education policy for them. You will be able to save not only on some of your taxable income, but also saving for your kids’ future.

• Do you have an old computer dying on you? You might want to get yourself a new desktop or laptop. Your computer purchase can be tax exempted once in every three years.

There are several more ways to save on paying income tax, but the ones above are more doable and practical. Hurry, you only have 2 weeks to do so. It’s not too late and not impossible.

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This post is brought to you by: Useful Tips For Life

Some last minute tips to save on income tax

The habit of saving money is always looked upon as something so simple yet never easy to do for most people. It takes a lot of discipline to save up regularly. It takes even more discipline to save for the future or a rainy day, as compared to saving up for a purchase of something of desire. Saving is actually not too difficult anymore in this day and age where technology has given us much convenience to do so. Here are some saving tips to share. It is all about making up your mind to do so, spend some time and effort to set things up once and for all, and you will be on your way to making regular monthly savings.

Assuming you are under employment and have a bank account where your monthly salary is automatically debited with your pay cheque, it is suggested that you set up another account for your savings to go into. A savings account is recommended for this purpose for 2 good reasons. Firstly, most savings accounts do not impose as high charges as current or checking accounts do. Secondly, savings accounts tend to give better savings interest rates compared to current accounts. You can opt whether or not you want this newly set up account to come with an ATM card. The pro of not having an ATM card is that it makes it inconvenient for you to withdraw the funds, and you are more likely to leave your savings intact for the long term. Even if you have an ATM card to your savings account, avoid withdrawing funds from it anyway.

From the bank account where you normally receive your regular salaries, instruct an auto-debit on a monthly basis to be transferred to the savings account that you have set up. This is a one-time set up on your side provided you select the recurring option and it is suggested that you set it on a monthly basis. As for the amount to be auto-debited to your savings account, it is entirely your choice. Set a certain percentage of your net income to be your savings, say 10% to start with. A note to add on this point is that you should set the date of the auto-debit to be just after you have received your salary. Salaries are normally paid on a certain date in the month, and you should take the savings portion out before you start making payments for your other loan commitments or any other expenses. The idea is that you should pay yourself first once you have received your pay cheque, and not the banks.

Once you have done this, saving money becomes automatic, hence the auto-pilot mode. It is as easy as A,B,C! You just need to put your mind to doing this, and be disciplined enough not to cancel that monthly auto-debit.

If you would rather prefer to put your cash savings into an investment vehicle instead, you can do this via regular or monthly purchase into unit trust funds or even units in shares. Again, these purchases can be done via auto-debits. You should speak with your unit trust agent or remisier about your options and how to go about investing regularly. For both these vehicles, you do not need to purchase units by the thousands if it is a recurring purchase. You can opt to buy units in the hundreds. That way, these investments become very affordable and over time, you will find yourself having significant holding of certain unit trust funds and stocks.

Save reguarly, and save wisely. It is a worthwhile exercise over the long term. Putting off a certain portion of your monthly salary will not make you much poorer month on month. But you will be surprised how much it can grow over the years, especially if you take into account the magic of compounded interests earned, or the growth of good funds and stocks.

Related Tips

• Some last minute tips to save on income tax
• Words of wisdom from financial guru Warren Buffet

This post is brought to you by: Useful Tips For Life

How to save money regularly and do it on auto-pilot mode