Updates to the Pensions (Tax Exemption) Rules and the Tax Rebate (Pensioners) Rules

Legal Notice 5 of 2024, published on 12 January 2024, updates the maximum amount of pension income which may be exempt as from year of assessment 2025 onwards as indicated in the Pensions (Tax Exemption) Rules, originally introduced in 2022.

The updated amounts are applicable on pension income derived on, or after 1 January 2024, by an individual, who is at least sixty-one (61) years old in the year in which the pension income is received and the pension income, were it not for these exemptions, is taxable in terms of Article 4(1)(d) of the Income Tax Act (the ITA). The amounts are as follows:

The Tax Rebate (Pensioners) Rules have also been amended through Legal Notice 6 of 2024. These are applicable to individuals who satisfy the same condition with respect to age as that which must be met for the exemption, and are also in receipt of a pension chargeable to tax under Article 4(1)(d) of the ITA. Through this change, the maximum tax rebates allowed to be set-off against the tax on the chargeable income is as per below, as from 1 January 2024: 

No changes were made to the actual calculation of the tax rebates, as applicable according to each tax status.

Should you require any further information in this respect, please do not hesitate to contact the undersigned or your KPMG contact.