Income Tax (Special Treatment on Interest on Housing Loan) Regulations 2009

In exercise of the powers conferred by subsection 36(1) of the Income Tax Act 1967 [Act 53], the Director General makes the following regulations:


Citation and commencement

1. (1) These regulations may be cited as the Income Tax (Special Treatment on Interest on Housing Loan) Regulations 2009.

(2) These Regulations have effect for the year of assessment 2009 and subsequent years of assessment.


Application

2. (1) These Regulations apply to the following banks and financial institutions:

(a) a bank or finance company licensed or deemed to be licensed under the Banking and Financial Institutions Act 1989 [Act 372];

(b) a bank licensed under the Islamic Banking Act 1983 [Act 276]; and

(c) a development financial institution prescribed under the Development Financial Institutions Act 2002 [Act 618].

(2) Notwithstanding subregulation (1), the Minister may approve any other institutions to which these Regulations may apply.

(3) Any reference to a bank or financial institution in these Regulations shall include a reference to any other institution approved by the Minister under subregulation (2).


Interpretation

3. In these Regulations, “housing loan” means any loan granted by a bank or financial institution to finance the purchase of a residential property.


Gross income of bank or financial institution

4. (1) Subject to this regulation, where in respect of any amount of interest due and payable by an individual on a housing loan granted by a bank or financial institution in the basis period for a year of assessment, a moratorium on such interest is approved by the bank or financial institution, such interest shall not constitute the gross income of that bank or financial institution for that basis period for a year of assessment.

(2) The interest referred to in subregulation (1) is interest which is due and payable for a period of twelve consecutive months beginning from the month where the moratorium is approved by the bank or financial institution.

(3) Notwithstanding subregulation (1), where any amount of interest referred to in subregulations (1) and (2) is received by the bank or financial institution in the basis period for a year of assessment, such interest shall be treated as the gross income of the bank or financial institution for the basis period for that year of assessment.


Conditions relating to individual to whom housing loan was granted, housing loan and moratorium

5. For the purposes of these Regulations, the following conditions shall apply:

(a) relating to the individual to whom the housing loan was granted—

(i) that the individual is a citizen;

(ii) that the employment of the individual has been terminated pursuant to a separation scheme or retrenchment, on or after 1 July 2008; and

(iii) that the termination of the employment of the individual is registered with the Director General of Labour, Ministry of Human Resources;

(b) relating to the housing loan, that the housing loan was granted prior to the termination of the employment of the individual; and

(c) relating to the moratorium, that the application for the moratorium shall be made by the individual to a bank or financial institution on or after 10 March 2009 but not later than 9 March 2010.


Made 10 March 2009

[Perb.0.3865/410;LHDN.01/35/(S)/42/51/231-17.11;PN(PU2)80/LIV]

Dato’ Hasmah binti Abdull ah
Director General of Inland Revenue