Chapter 3

What Type Of Donations Or Gifts Are Allowed Under Tax Deduction?

Malaysia income tax - tax deductions, donations

In addition to deducting tax relief from your annual income, you can still reduce your chargeable income with tax deductions.

A tax deduction is similar to a tax relief, where it reduces your chargeable income.

This is a bigger concern if you are filing for a business income tax. This is because there are specific categories of expenses that businesses are allowed to claim tax deductions.

What type of income tax deductions can you claim?

For non-business taxpayers, most of the tax deductions that apply for personal income tax are a result of Donations and Gifts.

Besides donations and gifts, there is also a whole other list of personal tax reliefs you can claim.  These claims come under another category of deductions from your chargeable income which is covered in the next chapter here.

Donations are only tax deductible if they are made to a Government approved charitable organisation or directly to the Government; and you must keep the receipt of the donation.

List of donations and gifts you can claim for income tax deduction

Here’s the list of contributions that can qualify for tax deductions under Donations & Gifts:

Gift of money to the Government, State Government or Local Authorities.
Gift of money to Approved Institutions or Organisations.
(Amount is limited to 10% of aggregate income)
Gift of money or cost of contribution in kind for any Approved Sports Activity or Sports Body.
(Amount is limited to 10% of aggregate income)
Gift of money or cost of contribution in kind for any Approved Project of National Interest Approved by Ministry of Finance.
(Amount is limited to 10% of aggregate income)
Gift of artifacts, manuscripts or paintings.
Gift of money for provision of Library Facilities or to Libraries.
Gift of money or contribution in kind for the provision of facilities in Public Places for the benefit of disabled persons.
Gift of money or medical equipment to any healthcare facility approved by the Ministry of Health.
Gift of paintings to the National Art Gallery or any State Art Gallery.

Source: LHDN

For example, if your chargeable income is RM55,000, and you’ve donated RM2,500 to an approved charitable organisation, you are allowed to deduct 10% of your aggregate income to reduce your chargeable income.

Of course, you’re not limited to just one deduction. If you’ve made several donations listed above you can deduct for them all accordingly.

iMoney income tax calculator

Too much math for you?
Go on to the Malaysia income tax calculator to calculate how much tax you will have to pay!

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