A tax incentives is a government’s measure that is intended to encourage individuals and businesses to spend money or to save money by reducing the amount of tax that they have to pay. A reduction made by the government in the amount of tax that a particular group of people or type of people or type of organization has to pay or a change in the tax system that benefits those people. Also the deduction, exclusion, or exemption from a tax liability, offered as an enticement to engage in a specified activity (such as investment in capital goods) for a certain period. A new tax incentive is to encourage the importation of manufactured products. For example?massive subsidies and tax incentives were given to encourage the formation of giant industrial complexes. Government offer tax incentives to businesses is to attract businesses, keeping them and getting them to expand operations often involves a city providing tax incentives. There are numerous advantages for tax incentives. Tax incentives are many times a government initiated program to assist businesses (small, medium or large corporations), to drive specific industries or sectors. These incentives can be cash based where a company gets a cash injection or can be a subsidy, or some other form of benefit. Each tax incentive will have their own requirements, regulations, processes, and documents. Some advantages of tax incentives are additional funds for the business to improve cash flow?ability to compete in a wider or even international market?possible capital investment?investment in people?improved business operations and access to skills and additional development. There are a wide range of tax incentives have been offered by Malaysia government in Budget 2018. The tax incentives I had choose was from personal income tax change which was 50% tax exemption on rental income not exceeding RM2,000 per month, per home, received by a Malaysian resident individual from residential homes (YA 2018 to YA 2020). Presently, rental income received by a resident individual is subject to income tax under Section 4(d) of the Income Tax Act 1967 (ITA) at the progressive rates applicable to the resident individual. It is now proposed that 50% of the rental income received by a Malaysian resident individual be tax-exempt, provided the following conditions are satisfied. First is the rental received must not exceed RM2,000 per month for each residential home. But since the exemption is not restricted to just one residential property, but as many properties as the individual owns. Second is the residential home must be rented under a legal tenancy agreement between the owner and the tenant. A written tenancy agreements (as opposed to equitable tenancies) are essential to claiming this exemption, with a fair assumption that the tenancy agreement should be duly stamped in order to qualify. And lastly is the tax exemption is given for a maximum period of 3 consecutive year assessments. The exemption is available from YA 2018 to YA 2020. The actual Budget announcement itself does state that the Government hopes “to encourage Malaysian resident individuals to rent out residential homes at reasonable charges”. Some have lamented that the tax exemption should have been granted to tenants to assist their costs of renting, instead of benefiting landlords who can afford to purchase investment properties. On the other hand,some believe that the exemption will encourage people in the higher-income tax bracket to buy more investment properties to rent out and possibly help to ease pressure from unsold and overhang units in the market. This would encourage more property investments and help to boost the overall property market. It is good to invest in properties as early as possible and the value appreciates over time.