25% Tax for Private Retirement Scheme (PRS) ?

Christmas is coming to town, but before that, it was also the time when many people are rushing to enroll/top up their Private Retirement Scheme (PRS). Why? Main reason is they want to enjoy the tax relief given of up to Rm3,000 per year. However, social media has over-took the whole atmosphere with the purported 25% tax on PRS. Is this true?

All I want for Christmas is Tax-Free...

Why suddenly got 25% tax? It was all started with the below video...

Anyway, some people had misunderstood the meaning and translated into such chaos in social media with more than few thousand likes and comments. Well, it seems like the respond garnered already impacting the PRS contributions for many people.

Since then, the Private Pension Administrator (PPA) which was set up to monitor and administer the whole PRS scheme, had issue a statement to clarify on this matter. Likewise, Inland Revenue Board (LHDN) also issue a statement on this matter. (Click here to view)

To summarize:

1. NO tax on PRS withdrawal when contributor reaches the official retirement age set (currently at age 55)
2. As per previous terms, 8% tax penalty will be imposed if contributor withdraw before retirement age.
3. However, the 8% tax penalty will be exempted if:
• In the event of Death;
• Permanent departure from Malaysia;
• Permanent total disablement (New addition);
• Serious disease (New addition); or
• Mental disability (New addition)

Gone are the so called bad news. Indeed, there is more good news with the 3 NEW pre-retirement withdrawal conditions. PRS contributors should feel relieve now.

Take the opportunity to invest before the closing date for respective PRS providers. You may refer to our previous article on PRS below:

• What is Private Retirement Scheme (PRS) ?
• How Private Retirement Scheme (PRS) actually works ?
• What Are the Tax Benefits for PRS ?

Bursa Malaysia's eStatement

Today, Bursa Malaysia introduced eStatement services to CDS account holders. It enables CDS account holders to receive statements and notices directly from Bursa Malaysia via email.

What's the benefits?

1. To receive CDS statements and notices efficiently and on a timely basis with NO extra cost
2. To receive CDS statements and notices directly to your personal email
3. Minimize risks of not receiving your CDS statements and notices
4. Less cumbersome to keep hard-copy statements compared to soft-copy

For many of us, this is definitely an environmental friendly way of communicating. Also, it effectively reduce the cost of doing business for Bursa Malaysia. Once it implemented successfully, the profits of Bursa should be better... Considering to invest in Bursa shares now?

How to register?

1. From now onward, you CDS statement of account and any notice you receive from Bursa Depository will include your "Unique Password Phrase". (This will ceased once you successfully provide your email address via Bursa Malaysia's website)
2. Then, log on to Bursa Malaysia's website and select "Request for eStatement"
3. Follow the steps and fill-in your personal details as required

As simple as that, NO document needed, NO extra cost, NO headache again. However, please be mindful that once you have provided your email address for eStatement, you will not receive any statements or notices via normal post anymore. Once successful register, you will receive an email confirming your email address within 2 business days and thereafter a computer generated confirmation notice will be mailed to your address.

I have already register my email address under eDividend initiative, do I need to register again?

YES, because there are different type of services.

I have more than one CDS account, do I need to register my email address for each of them?

NO, you just need to register one email address ONCE for all your CDS accounts.

For nominee account, how is it?

You will need to contact your nominee (etc banks or stock broking firms).

For more FAQs answer, click here.

DBKL hikes assessment rate for the sake of hiking?

Maybe the timing was not right, DBKL is in hot water these few weeks, lambasted by KL citizens for its proposed assessment rate hike up to 200%. Just when GST is coming to town, coupled with the fact that the more expensive electricity bill next month, citizens were feeling the pinch in their pocket.

What's the reason for the hiking?

Answer: "The last increase was more than 20 years ago."

As simple as that? It must be joking us... Why don't you lower down your salary because you haven't done so for past years? We're not objecting about the increase for sake of objecting. But, some form of better reason should be justify for the proposal.

Is DBKL running out of money?

According to Star newspaper, Tan Sri Ahmad Fuad Ismail, predecessor to the current mayor, pointed out that he had raised reserves amounting to RM3bil prior to retiring last year. This means that the current mayor inherited RM3bil when he took over.

With additional development expenditure and grants funded by Federal Government under various plans, DBKL should be enjoying handsome surplus. In fact, DBKL is making profits every year and together with its RM3bil cash coffer, we just don't know why such assessment hike was needed.

Instead, DBKL should cut rate to lessen the burden of rakyat.

Am I correct?

Top 3 Common Investing Mistakes

When coming to investing, do you wonder why retail investors always lose out? What are the common mistakes they made? In this article, Finance Malaysia blog pointed out the top 3 investing mistakes by retail investors.

The 3 common mistakes:

1. Trying to time the market.
   "Every often, investors thought that they can forecast the short-term direction of share market, or listen to other people (market timers). It's a big mistake. It was like a gamble, guessing the ups and downs. Can you see a gambler become millionaire?"
   
   
2. Being an active trader.
   "Buying blue-chip counters with long-term profits as a goal is the real way of investing. Don't trade actively which can resulting your goal being blurred along the way."
   
   
3. Using those high cost investing tools.
   "Every single penny you saved contributes to the total returns you gained from an investment. Investors should avoid those high charges investing tools to optimise their return. Can you guaranteed the company that charged higher perform better?"

Happy Investing !!!