In our previous post about IIT, we mentioned there is six items of special additional tax deductions which could be deducted from the taxpayer’s income, that is: children’s education, continuing education, medical treatment for serious diseases, housing loan interest, house rent, and support for the elderly.
Now let’s see more details:
1. children’s education
RMB 1,000 per month for each kid could be deducted, if the kid is accepting pre-school education or full-time education for academic qualification. It means from the age of three till the kid finishes his/her higher education (including junior college, undergraduate, postgraduate and doctoral education), 1000 RMB could be deducted from the taxpayer’s income or 500 RMB from the husband and wife’s perspective income for each kid.
2. Continuing Education
If a taxpayer is accepting continuing education himself/herself for academic qualification (degree) within China, RMB 400 shall be deducted per month.
3. Medical Treatment for Serious Diseases
If the accumulated amount a taxpayer has to pay by himself in a year exceeds RMB15,000, the portion above 15000RMB could be deducted, with a limit of no more than RMB80000.
For example, suppose a taxpayer has spent RMB 300000 for his medical treatment, RMB180000 of which could be reimbursed by medical insurance fund. He has to pay RMB120000 himself. For the portion of RMB105000, as more as RMB80000 could be deducted.
4. Housing Loan Interest
RMB1,000 could be deducted if a taxpayer is paying loan interest for purchasing his first residence, as long as the loan interest is actually incurred. However, the longest term for the deduction could not exceed 20 years.
5. Rent
The exact amount could be deducted vary from city to city
(1) In Beijing, Shanghai, Tianjin, or capital city of a province, or Dalian, Qingdao, Ningbo, Xiamen and Shenzhen etc., it’s 1500RMB per month；
(2) Except the above-mentioned city, if the population who have local “Hukou” in a city exceeds 1 million, it’s 1100RMB per month
(3) if the population who have local “Hukou” in a city is less than 1 million, it’s 800RMB per month.
6. Support for parents
(1) If the taxpayer is the only child of his parents, RMB2,000 could be deducted per month;
(2) If the taxpayer is not the only child, the quota of RMB2,000 shall be shared among he/she and his/her siblings. For each person, the share could not exceeding RMB1,000 per month.
Still confused about tax deduction? Please feel free to contact us for further clarification.
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