The Chinese government on Saturday published a draft version of new rules for tax deductions available to individuals as part of a major overhaul of the country's individual income tax law.

China's parliament in August passed changes to the law, raising the threshold, and also allowing for deductions on certain expenditures, which according to the draft rules would cover costs including education, health care, and interest on home mortgages.

It is the latest move by China's policymakers to cut taxes for companies and individuals in the hope of spurring growth. Although China has the world's second largest economy, personal consumption levels relative to GDP are among the lowest in the world.

The draft rules, published on the website of the State Administration of Taxation, are open for public comment and could change before the final version is published.

The proposals include a deduction against tax of 1,000 yuan ($144.32) a month for interest payments on home mortgages, and 800 to 1,200 yuan a month for rental payments.

They also proposed deductions of up to 12,000 yuan per year for a child's education and of up to 60,000 yuan per year for medical expenses above a base amount.

For costs related to caring for an elderly parent, 2,000 yuan per month can be deducted from taxable income, according to the draft rules. ($1 = 6.9291 Chinese yuan renminbi)

(Reporting by Elias Glenn and Jenny Su; Editing by Simon Cameron-Moore)

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