Left in the cold in earlier budgets, the middle class will next year enjoy benefits as Budget 2016 extends a list of tax exemptions for the "middle 40 percent" of households.

Prime Minister Najib Abdul Razak said this is to assist the 'M40' - middle class households earning RM3,680 to RM8,320 a month.

“However, this definition will be refined from time to time,” Najib said when unveiling Budget 2016 in Parliament today.

They are:

Tax relief limit up from RM1,000 to RM2,000 for each child aged 12 and below
Tax relief limit up from RM3,000 to RM4,000, for those with spouses who do not earn an income;
Tax relief of RM1,500 per parent, for those supporting elderly parents. The parents must be aged 60 and above and earning less than RM2,000. The individual need not be living with the parent. (Currently, those caring for sick parents enjoy tax exemption of up to RM5,000 spent on medical care);

Tax relief limit up from RM6,000 to RM8,000 for each child studying at a tertiary institution; and

Tax relief of up to RM6,000 for parents with disabled children. This is separate to the tax exemption for disabled children enrolled in institutions of higher education.

Middle class families are feeling the squeeze, with cost of living rising following the implementation of goods and services tax, rise in petrol prices and tolls.