Q: 

I receive a care allowance of RM5,000 from my employer each year to take care of my children and parents. Is this allowance subject to income tax?

A: 

With effect from the year of assessment 2025, the income tax exemption of up to RM3,000 per year for a care allowance received from an employer has been expanded to include care for parents, adoptive parents, or grandparents. As such, RM3,000 of the care allowance will be exempted and only the remaining RM2,000 is subject to income tax.

I am a sole proprietor. I organised an annual dinner for my employees. I also invited a few suppliers and customers. Is this expenditure tax deductible?

A: 

If the purpose of the annual dinner is for your employees, inviting suppliers and customers to the dinner is considered incidental. Therefore, the expenditure incurred on the annual dinner is considered as entertainment for employees and is tax deductible.