Reduce Your Income Tax – Donations & Gift Tax Deductions

When filing your personal tax income, it is crucial to know how you can lessen your chargeable income. Besides tax reliefs, tax deductions are an important factor in reducing your overall tax liability. 

How does Tax Deduction Work? 
Tax deduction work by reducing your chargeable income and applies to both individuals and businesses. Among the key areas where taxpayers can claim deduction is through donations and gifts.

Donations are generally subject to limits based on your total taxable income. Make sure to verify the limits for each donation category to ensure compliance with LHDN regulations.

There are total 9 categories of donations, gifts, and contributions that are eligible for tax deductions for the 2024 assessment year. It is as follows:

Documentation 
As always, ensure you have proper documentation. Receipts or acknowledgement letters from the recipient organisations must include their LHDN registration number, donated amount, and the date. If you fail to produce these documents when needed, your donation will not be accepted for tax deductions.  

How to identify recognised institutions? 
You can check the institutions recognised by LHDH by clicking here. Any donations made to organisations or charity bodies that is not on the list will not be eligible for tax deductions.

Still have taxes due after tax reliefs and deductions? The easiest and most convenient way you can pay is via PBe Online Banking. Click here for more info.