Tax Deductions Lessen Burden On Needy

Special individual income tax deductions to lower the tax burden for those who have certain expenditures have been announced by the State Council, China’s Cabinet.

 

Those expenditures cover six areas, including children’s education, continuing education, health treatment for serious diseases, housing loan interests, rent and care for the elderly.

 

The new temporary measures will come into effect along with the amended personal individual income tax law on January 1.

 

For children’s education, an amount of 1,000 yuan (US$145) will be deducted every month from the parents’ taxable income for each child’s education from preschool all the way to doctoral education, including technical education.

 

Taxpayers who are receiving continuing education can also enjoy the deduction of 400 yuan a month for 48 months at most for a degree or 3,600 yuan in total for professional qualifications education.

 

Taxpayers with serious diseases will have their amount of out-of-pocket medical costs (between 15,000 yuan and 80,000 yuan) deducted from their taxable income each year.

 

Taxpayers or their spouses who have mortgage loans for a first home can have a deduction of 1,000 yuan per month from taxable income.

 

Housing rent deduction of up to 18,000 yuan each year will be granted to taxpayers owning no housing in the city where they work.

 

An amount of up to 2,000 yuan every month will be deducted from an only-child taxpayer’s taxable income for his or her parent who is over 60. Those who have siblings can share the 2,000 yuan deduction quota.

 

China started implementing a new standard for individual income tax from October.

 

However, as the deduction policy covers so many areas and involves complicated scenarios, new challenges facing tax collection and management will appear, which requires better social governance, said Tang Jiqiang, a professor at Southwestern University of Finance and Economics.

 

Source: Xinhua