GUIDELINES

Specific deduction for gifts and donations under section 44 of the
Income Tax Act 1967 Income Tax Act 1967


Section 44
 Specific Deductions
Effective YA
(6)
 Gift of money made to :
  1. Government;
  2. State Government;
  3. Local authority; or
  4. Approved institution or organisation

Restriction
Gift of money made by a company:-
    • Restricted to 5% of the aggregate income (YA 2001 to YA 2006)
    • Restricted to 7% of the aggregate income (YA 2007 onwards)


Effective from YA 2008, this restriction has been expanded to include all persons.

Tax Deduction
Donors who have made donations to an institution or organisation or fund approved under subsection 44(6) will qualify for deduction in respect of their donation in computing their aggregate income.

However, it should be noted that only cash donations supported by official receipts will qualify for tax deduction. Donation in kind (e.g. food, clothing, computers, property, shares and building materials) will
not qualify for tax deduction.

Official receipts for all donations received must clearly indicate the following;

1. Name of the organisation/fund;
2. Serial number;
3. Reference number of the approval i.e. file reference number;
4. Period of approval; and
5. Gazette notification number.

Sample


 1
(6A)
 Gift of artefact, manuscript or painting to Government or State Government
1997
(8)
 Gift of money for the provision of library facilities which are accessible to the public, to public libraries and libraries of schools and institutions of higher education, not exceeding RM20,000
1995
(9)
 Gift of money or contribution in kind (the value to be determined by the relevant local authority) for the provision of facilities in public places for the benefit of disabled persons
1998
(10)
 Gift of money or medical equipment (value as certified by the Ministry of Health) to any healthcare facility approved by the Ministry of Health, not exceeding RM20,000
1998
(11)
 Gift of painting (value to be determined by the National Art Gallery or any state art gallery) to the National Art Gallery or any state art gallery.
1998
(11A)
 Payment of zakat perniagaanto an appropriate religious authority established under any written law or any person authorized by such religious authority, not exceeding 2.5% of the aggregate income of the company.

With effect from YA 2007, the deduction has now been extended to include zakat paid on business income by cooperatives and trust bodies.
2005
1 1 1

 

 

 

 

 

Updated on 7th June 2008.

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