DONATION,

RELIEF AND REBATE

Donation, relief and tax rebate are

deduction from income of
taxpayers in order to reduce on
their tax liable.

Donation is allowed for deduction

on aggregate income to get total
income.
The donation is allowed for
individual or companies whether
resident or non resident.

Deduction on relief is given on total

income in order to get taxable
income.
Deduction on rebate is given after
tax computation in order to get
total tax that should be paid.
However, these relief and rebate
are allowed for resident individual.

DONATION- Sec. 44(6)

Sec. 44(6)- Donation or gifts paid to

government, a state government, a
local authorities or an institution or
organization approved by the DG can be
deducted from the aggregate income of
a person.
Deduction of any gift of money made by
a company to any approved institutions
or organization shall not exceed 7% of
the aggregate income of the company.

Approved Activity/Project
Sec. 44(11)

Sec. 44(11B)- Donation in kind for any

Approved Sports Activity or Sports Body

Limited to 7% of aggregate income

Sec. 44(11C)- Donation in kind for any

Approved Project of National Interest
Approved by Ministry of Finance

Limited to 7% of aggregate income

Approved Organization
Sec. 44(7)

Sec. 44(7)- Institution or organization

approved which not profit oriented such
as:

Hospital
Public institution or welfare
University or other education institution
Technique Training institute or vocational
organized by statutory body.
Institute aided by gov. which running their
research on social-economic.

Other Donations Sec. 44

Sec. 44(6A)- Gift of artifact, manuscripts or

paintings
Sec. 44(8)- Gift of money for provision of libraries
facilities or to libraries
Sec. 44(9)- Gift of money/contribution in kind for
the provision of facilities in public places for the
benefit of disabled persons
Sec. 44(10)- Gift of money or medical equipment to
any healthcare facility approved by the Ministry of
Health
Sec. 44(11)- Gift of paintings to the National Art
Gallery or any State Art Gallery

Current year business loss (Section

44(2) - if any) should be deducted
before deduction of donation.
The deduction allowed is limited to
aggregate income.
The remaining of the donation that
cannot be deducted disallowed for
carried forward.

There are several donation that allows

for deduction:
a) Cash donation to gov. or approved
institution [sec.44(6)]
b) total amount not exceed RM20,000 that
paid by taxpayer to public library, school,
and higher learning institution. The
deduction is allowed up to
RM100,000{sec.44(8)] for individual who
running a business.

c) Cash donation or contribution of facilities for

public.
d) Cash donation, cost or value (authorized by
Ministry of Finance) not exceed RM20,000 for
medical equipment that gift to the treatment
center approved by Ministry [sec.44(10)]
e) Donation like as artifact, manuscript or
drawing to Federal Gov. or State Gov. is
allowed as deduction. The deduction is
based on an evaluation by museum or Arkib
Negara [sec.44(6A)]

Formula:
RM
Statutory business income xx
(+) Gross Income (Employment, dividend,
interest, rental, pension, annuity,
other income) xx
Aggregate income xxx
(-) Donation
(x)
Total income xxx

Personal Relief

W.e.f YA 2010,resident individual

would be given RM9,000 in respect
of himself. This applies to a wife
who is under separate assessment.
For combine assessment, RM3,000
is given to the husband.

Medical Expenses for parents (S 46(1)c)

Maximum relief is RM5,000

Claim has to be evidenced by receipt issued
by medical practitioners
W.e.f YA 2011 extended to include medical
treatments, special needs, carer expenses
Carer should not be taxpayer, spouse or
child
Parent must be tax resident

The services are provided in Malaysia

Medical Equipment Sec.46(1)(d)

Medical Equipment to a max. of RM5,000
would be allowed as relief to purchase of
supporting equipment for his own use, if
he is disable, or for the use of his wife,
child, parent who is disable.
The request for relief must be
accompanied by a letter of certification
from the Ministry of National Unity and
Community Development.

Disabled Taxpayer Sec. 46(1)(e)

W.e.f YA 2005, a disabled taxpayer
gets an additional RM6,000 personal
relief.
Education fees (individual) Sec. 46(1)(f)

Maximum of RM5,000 would be given to a

resident individual who take up any course of
study up to tertiary level in any institutions or
professional body in Malaysia recognized by
the Government

Medical Relief Sec.46(1)(g)

A personal relief of RM5,000 is allowed for

medical expenses incurred on and individual,
spouse or children in respect of serious
disease (e.g. cancer, parkinson, renal failure,
leukemia and other similar disease).
A certification from a medical specialist is
required.
In the case of a combined assessment for
husband and wife, if the wife has no total
income, the relief given to the husband
cannot exceed RM5,000.

Two individuals (including a married

working wife) can claim the RM5,000
each in respect of the same parents.

Complete Medical Examination

Sec.46(1)(h)
A deduction up to RM500 per year is
to be in respect of complete medical
examination expenses on a taxpayer,
spouse and the child
This expenses are to taken as part of
the RM5,000 threshold for medical
expenses on a serious diseases.

Purchase of books

W.e.f YA 2007, a sum of RM1,000 is

given for the purchase of books,
journals, magazines and other
similar publications for the use of
taxpayer, spouse or children.

Purchase of personal computer, SSPN,

Sports Equipment and broadband
subscriptions

Acquisition of personal computer (Sec. 46(1)(j)) shall be given tax relief of RM3,000 (once in every
three years).
Net Saving of RM3,000 into SSPN on own child
education (Sec. 46(1)(k)) - is allowed to individual.
W.e.f YA 2012-2017 the amount is raised to
RM6,000
Purchase of sport equipment for sport activities
(Sec. 46(1)(i)) maximum relief RM300.
Subscription fees for broadband register in the
name of individual maximum relief RM500 per
year

Interest expenses to finance purchase of

residential property

Relief up to RM10,000 a year for three

consecutive year from the first year the interest
is paid
Subject to:

Taxpayer is a Malaysian citizen and a resident

Sale and purchase agreement is signed

between 10 March 2009 31 December 2010

Residential property is not rented out

If More than 1 person are eligible to claim this
relief and the total interest exceed RM10,000
need to be apportioned accordingly

Husband/Wife Relief Sec.47

an individual has a spouse living

together in a basis year, is eligible for
a deduction of RM3,000.
Where in the basis year, the resident
individual cease to live with that
spouse or the spouse ceased to be
husband and wife, the RM3,000 is not
apportioned on a time basis but given
in full.

If the wife elects for separate assessment,

she is eligible for a deduction of RM9,000
for herself and her husband cannot claim for
wife relief.

Disabled Wife/Husband Sec. 47(1)

A relief of RM3,500 is given to a taxpayer

for his disabled wife/husband.

Alimony Payments- Sec. 47(3)

Where the husband has made

payments in the basis year in the
nature of alimony, the payment is
allowed as a relief to the husband but
the total of the relief given under Sec.
47(1)(wife relief) and Sec. 47(3)
(alimony payments) cannot exceed
RM3,000.

Example
Mr and Mrs Ilhan were divorced on 1.7.12.
Mr. Ilhan re-maried on 1.10.12. The
alimony payments made by Mr Ilhan to
his former wife in 2012 amounted to
RM3,000.
- For YA 2012, Mr Ilhan is eligible for wife
relief of RM3,000 under sec.47(1)
because he re-married on 1.10.12.

Alimony payments as wifes income.

Where under a deed of separation or
court order alimony is paid to the wife
such alimony is income of the wife under
sec.4(e) of the ITA. However, payments
in respect of children may be considered:

Income of the wife

Income of the children or
Income of the father as settlor.

Child Reliefs- Sec.48(1)

Child relief is granted where the child at any

time in the basis year is unmarried and
maintained by the parent taxpayer and:

Is under 18 years old at the beginning of

relevant YA;
Is over 18 years old at the beginning of the YA
and receiving full time instruction at a university,
college, school or other similar educational
establishment
Eligible to a relief of RM1,000 for each child

Unmaried child over 18 years old and:

(i) receiving further education in Malaysia in
respect of an award of diploma or higher
(excluding matriculation/preparation courses
(ii) receiving further education outside
Malaysia in respect of an award of degree or
its equivalent (including Master/PhD);
(iii) the instruction and educational
establishement shall be approved by the
relevant government authority
Eligible for child relief RM4,000 each child

Is over 18 years old at the beginning of the YA

and view to qualifying in a trade or profession.
In this case, the parent taxpayer will qualify
for relief if he contributes towards the child in
one of the following ways;
a.Cost of part-time education of the child in
relation to the trade or profession.
b.Cost of premium payable in respect of the
articleship.
c.Cost of other payments in respect of childs
articleships.

Disable Child
a.Age 18 years and above, not married and
pursuing diplomas or above qualification in
Malaysia or bachelor degree or above outside
Malaysia in program and in Higher Education
Institute accredited by government
Additional exemption of RM4,000
(in total RM5,000)

Childs Total Income- sec.48(5)

Where a child has his or her own income
whether part time work, trust, or others,
comparison should be made between total
income received and total relief claimed:
1.If income received by child exceed total
allowed deduction, there is no relief given
to the child.
2.However, if the income received by the
child less then total relief, the relief that
could be given is total qualify relief.

Example:
Mr Bakar has one child aged 18 on 1.1.2012. The
child is studying at the UUM. On 1.7.12 the child
married . During 2012 the childs income from
part time teaching is RM5,000.
The parents do qualify for child relief YA 2000
since they maintained a child who was unmarried
for half 2012 but the qualification is frustrated by
sec.48(5), since the total income of the child is
RM5000 and this exceeds the child relief due
which is RM4,000. Had the childs income in 2012
been RM200, the father could claim child relief of
RM4,000 since RM200 does not exceed RM4,000.

Taxpayer and ex-wife

claiming for child ReliefWhere two or more individuals are
Sec.48(4)
entitled to claim relief in respect of the

same child, the child relief due is

apportioned between the claimants in
the ratio of each contribution over total
contributions:
Child relief x Payment by one spouse
Payment by both spouse

Example:
Mr and Mrs R. Carlos were divorced on
1.7.2012. They have one child under the
age of 16. In 2012 the father paid
RM2,000 as living expenses for the
child. The mother spent RM1,000 in
respect of the childs living expenses.
Both parents can claim the child relief
for YA 2012 as follows:

Fathers portion:
RM2,000 x RM2000 = RM1,333
RM2000 + RM1000
Mother's portion:
RM1,000 x RM1000 = RM667
RM1000 + RM2000

Insurance and
Employment Provident
Where(EPF)
an individual
resident in Msia
Fund
Reliefs

has paid a premium for any insurance

or deferred annuity {sec.49(1)(a)]
Where an individual resident in Msia
has made contribution scheme as an
employee or self-employed person
within meaning of the EPF Ordinance
1951 [sec.49(1)(b)]

Where total contributions made under

insurance and EPF exceed RM6,000,
relief is limited to RM6,000. In cases
where the sums paid are less than
RM6,000, the actual payments qualify
for relief.

Medical and Educational Insurance-S49(1)

(B)

W.e.f YA 2000, RM3,000 is given for premiums

paid by an individual in respect of medical and
educational insurance. There is no further
deduction for amount paid by wife under
combined assessment.

There is no further deduction for insurance

premium for education or medical benefit paid
by wife under combined assessment.

Insurance on education or for medical

benefits means an insurance contracted
by an individual for himself, his wife or
child or in case of the wife, for herself,
her husband or child.

Summary of Personal
Relief
RM
1.
2.
3.

4.
5.
6.

Personal
9,000
Parents medical expenses
5,000 (max)
Basic supporting equipment
for disabled individual, wife,
children or parents 5,000 (max)
Disabled individual 6,000
Education fees (individual)
5,000
Medical expenses
for serious diseases5,000 (max)

7.
8.
9.
10.
11.
12.
13.
14.

Complete medical examination 500 (max)

Purchase of books/journal/etc 1,000 (max)
Purchase personal computer
Net saving in SSPN (2012-2017)
6,000
(max)
Purchase of sport equipment
300 (max)
Broadband subscriptions fees
500 (max)
Interest on mortgage
10,000 (max)
Wife/husband 3,000 (max)

15. Child relief

Ordinary child
1,000
18yrs A-Level, matriculation
1,000
18yrs receiving higher education
at local university or college 4,000
Higher education overseas
4,000
Disabled in university
5,000

16.

Life insurance premiums

17.

and EPF contributions

6,000 (max)
Insurance premiums for
education or medical benefits3,000 (max)

Tax Computation

Example

Tax Rebates Sec.6A

Sec.6A was introduced w.e.f 1997. The types of

the tax rebates given under Sec. 6A are (YA2009):
RM400 for an individual who has been given
personal relief under sec.46(1)(a) where his
chargeable income for that YA does not exceed
RM35,000
RM400 for an individual who has been given
wife relief under sec.47(1) (combined
asessment) where the chargeable income for
that YA does not exceed RM35,000
RM400 for a wife of an individual who is taxed
separately if her chargeable income for that YA
does not exceed RM35,000

Tax Rebates Sec.6A

Zakat & Fitrah Subject to the maximum of

tax charged
Fees or Levy on foreign worker subject to the
maximum of tax charged

E.g For the year ending 31.12.212, a husbands

business income is RM30,000 and the wifes salary
is RM32,000. The tax payable by them is as follows:

Husband
Wife
Total income 30,000
32,000
Personal relief 9,000
9,000
Chargeable income 21000
22,000
Income tax on 1st RM20000
475 1st RM20000
Balance 1000@7%
70 Balance 3000@7%
545
685
Less: Rebates Less: Rebates
400
self 400 Tax payable
285
wife(wife relief nit given) ___
Tax payable
145

475
210

E.g facts are the same as in example

above, but the tax payer has paid zakat of
RM70 in 2012. The payment is evidenced
by a receipt. The tax payable as follows:

Husband
Wife
Chargeable income
22000
24000
Income tax
545
685
Less: Rebates 400
Less: Rebates
400
Zakat
70
470
Tax to be paid
Tax to be paid
75

285

Joint and Separate

Assessment

Sec. 45(2)- where an individual and his wife

were living together in the basis year for a
YA and did not in the basis year cease to
live together.

The wife may elect in writing(wife who elects)

that her total income shall be aggregated with
the total income of her husband and assessed in
his name for that YA.
The husband may elect in writing (husband who
elects) that her total income shall be aggregated
with the total income of his wife and assessed in
her name for that YA.

W.e.f 2001 where the wife has income or

not and elects for joint assessment, the
maximum for EPF, life insurance, medical
and education premium, and annuity
premium only limited to maximum of
husband. The wife is not qualify to claims
all these relief.
The wife also not qualify to claim all
expenses related to medical treatment that
made to her disabled parents.

Statutory, Aggregate, Chargeable

Income, and Tax payable
RM
Statutory Income from business
xxx
(+) Gross income from other sources
(salary, dividend, rent, pension, annuity,
and others income) xxx
Aggregated Income
x
(-) Donation
(x)
Total Income
xxx
(-) Reliefs (self, wife, child, EPF and life insurance,
medical and education premium insurance, annuity
premium, and others)
(xx)
Chargeable Income
xxx
Tax (refer to tax rate schedule)
xx
(-) rebate:
Self, wife, zakat
(x)
(-) Dividend credit (sec.110)
(x)
Tax Payable
x

Example of joint assessment.

Daud and his wife received income as
follows:
Daud
Wife
Salary
45600
Dividend(gross)
12000
Rent 16000
Donation(approved) 600
EPF contributions
2,750
Life Insurance Premium 8,000
3,000

They have four children below 18

years. His wife claims for child
relief.
Q: Compute tax payable for YA
2001 following separate and
combined assessment.

Separate Assessment
Daud

Wife

Dividend
12,000 Salary 45,600
Rent
16,000 ____ Aggregate income28,000
Agg.
income
45,600
Donation
(600)
Total Income45,000
Self
(9,000) Self
(9,000)
Life insurance(max.)
(6,000)
Child (4,000)
Chargeable income
13,000 EPF/Life Ins.
(5,750)
C.I 26,250
Tax on 10,000=
175.00 Tax on 20,000= 475.00
3,000@3%=
90.00 6,2500@7% = 437.50
Tax payable 265.00 912.50
Less:
Rebates
400.00 400.00
Tax payable
Nil
512.50

Joint Assessment

Total income for husband

and wife combined:
Husband
28,000
wife
45,000 Total Income
73,000
Less relief: Personal- Husband 9,000
- Wife
3,000
(12,000)
Children
(4,000)
EPF/Life insurance
(6,000)
Chargeable Income
51,000
Tax on 50,000
=3,325.00
balance 1,000@19% = 190.00
Tax payable
3,515.00