Chapter 3
What Type Of Donations Or Gifts Are Allowed Under Tax Deduction?
Image source: pexels.com
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 as there are specific categories of expenses that businesses are allowed to claim tax deductions.
For non-business taxpayers, most of the tax deductions that apply for personal income tax are a result of Donations and Gifts. There is also a whole other list of personal tax reliefs you can claim the most of your deductions from your chargeable income which is covered in the next chapter here.
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 7% of your aggregate income to reduce your chargeable income.
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 7% of aggregate income) |
| Gift of money or cost of contribution in kind for any Approved Sports Activity or Sports Body. (Amount is limited to 7% 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 7% of aggregate income) |
| Gift of artefacts, 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. |
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.
Leave your comment