Non-cash donations: can we issue a tax receipt for rice, equipment or a donated car?

The donor who calls asking for "a receipt for the rice"

A company drops off 200 bags of rice for your food-relief programme, or a member hands over a laptop "for the office," or someone offers their car, or an accountant volunteers to do your books for free. Everyone assumes a receipt follows — cash gifts get one, after all. The awkward part is explaining that this one might not.

Under LHDN's own current guidance, that awkwardness is correct, not a gap in your process. Public Ruling No. 7/2025, Taxation of a Resident Individual, Part I — Gifts or Contributions and Allowable Deductions (published 5 December 2025, seventh edition of a ruling first issued in 2005), sets out every gift a person can claim under sections 44(6) to 44(11D) of the Income Tax Act 1967 ^[1]. The first and best-known one — subsection 44(6), the provision your organisation's own approval letter is almost certainly issued under — is described in exactly these terms:

"Gift of money to the Government, a State Government, a local authority or an institution or organization, or a fund approved by the DGIR — subsection 44(6) of the ITA." ^{[1, §5.2.1]}

Money. Not "a gift", not "a contribution in kind" — money. Gifts straight to the Government, a State Government or a local authority are unrestricted; gifts to a DGIR-approved institution or fund (the case for virtually every NPO reading this) are capped at 10% of the donor's aggregate income ^{[1, §5.2.1]}. LHDN's own plain-language FAQ on subsection 44(6) puts the in-kind point even more bluntly: "Only cash contributions are allowed for tax deductions under subsection 44(6)... Institution/organization/fund can accept contributions in the form of goods, but tax deduction receipts cannot be issued for them" ^{[4, Q25]}. If your organisation's tax-exemption approval is an ordinary s44(6) approval — covered in our s44(6) approval guide — it does not, by itself, extend to anything a donor hands you that isn't cash. (Note: PR No. 7/2025 is framed around resident individual taxpayers specifically ^{[1, §1.1, §3.4]}; the underlying s44 subsections aren't limited to individuals, but confirm the equivalent treatment for a corporate donor with your own advisor.)

Practical tip: don't assume "tax-exempt organisation" means "every gift we receive is tax-deductible" — the exemption attaches to the form of the gift as much as to your status. If a donor asks for a receipt for goods, check the narrow categories below before promising anything.

The narrow list of in-kind gifts that do qualify — and who has to approve them

The Act does carve out a small number of specific in-kind categories. PR No. 7/2025 lists them, each naming the body that certifies the value — never the donor, never your NPO ^{[1, §5.2]}:

Notice what these are not: a general "donate anything useful to a charity" provision. They are gifts to specific recipients (the government, a state art gallery, an MOH-approved healthcare facility) or contributions to a specific, pre-approved project. A bag of rice to a temple's food bank, a laptop to a clan association's office, or a car handed to a welfare society fits none of them. There is no catch-all "gift of goods to an approved charity" subsection.

Practical tip: before telling a donor "yes, that qualifies," check the recipient and purpose against the table above, not just whether your organisation is generally 44(6)-approved — and if it genuinely fits, get the valuation from the named authority, never the donor's invoice or your own estimate.

The company that wants a deduction for its own contribution — a different mechanism entirely

This is the part that trips organisations up most: a company donating goods or services doesn't get your organisation to issue it a receipt for the item's value. Instead, it applies for its own, separate deduction under paragraph 34(6)(h) of the Income Tax Act, against its own business income — and the process runs through the government, not through you.

The Ministry of Finance's guideline on subsection 34(6)(h), effective 15 September 2025, sets the mechanics ^[2]: eligible forms are cash, new equipment, services (valued at the cost of providing them, not the fee the donor would otherwise charge), and stock-in-trade (valued at cost, not retail price) ^{[2, §4.1–4.2]}. The project must be approved before the contribution is made — by the Relevant Government Authority (RGA) for contributions up to RM300,000, or the Ministry of Finance itself above that ^{[2, §2.2, §6]} — and must be a genuine community/charity project (education, health, housing, poverty relief, infrastructure, ICT, environment, or heritage conservation) benefiting the public with nothing given back to the donor ^{[2, §3]}. The donor keeps the approval letter, a recipient's acknowledgement, and an RGA value-confirmation letter, then claims the deduction on its own tax return ^{[2, §7]}. The guideline is explicit that cash gifts to an institution already approved under s44(6) don't use this route — those go through s44(6) instead ^{[2, §9(i)]}; 34(6)(h) exists for the in-kind and services side of business giving.

So when a company says "we want to donate 200 bags of rice and get a deduction," the honest answer is: their accountant can apply for RGA approval of the food-relief distribution as a qualifying project before the rice is handed over — but your organisation doesn't issue a receipt for it, and if they skip that process (as most casual in-kind gifts do), no deduction is available to either side.

A sibling provision, s34(6)(ha), under the same guideline, covers businesses financing public infrastructure (a bus shelter, a community hall) on the same terms ^[2]. Neither provision is usable by an ordinary individual with no business income: both are restricted to "companies and others with business income (individuals, partnerships, trust bodies and co-operatives)" ^{[2, §5.1]}.

Practical tip: if a corporate donor asks about a deduction for goods before they give, point them to their own accountant and the MOF/RGA process — it's their application, not yours, and you should never offer to "certify the value" of a donated item yourself.

The laptop, the car, and the free professional hours

Individual, non-business donors sit outside almost all of the above. A member's used laptop or personal car doesn't fit s44(6A)/(9)/(10)/(11) (each names a different specific recipient or purpose), and an ordinary individual has no "business income" to claim a s34(6)(h) deduction against even if the gift were otherwise eligible. In practice, most in-kind gifts from individuals have no tax-deduction route at all, however generous and useful they are.

Free professional services sit in the same place — an accountant's bookkeeping, a doctor's free clinic, a volunteer's time. Section 34(6)(h) lists "services" as an eligible form, but only when the contributor is a business with prior project approval, valued at the cost of delivering the service, never the fee it would otherwise bill ^{[2, §4.1–4.2]}. A volunteer donating personal time outside any registered business has no mechanism to plug into — there is no provision anywhere in the Act for deducting volunteered time. Say this plainly to a donor expecting a receipt: their generosity is real, but the tax system has no lever for it. That's a limitation of the law, not your paperwork.

Valuation: never the donor's own number

Every provision above shares one design feature: the value is set by a named third party, never the giver and never the recipient. Artefacts/manuscripts/paintings to government: Department of Museums Malaysia or National Archives ^{[1, §5.2.2]}. Facilities for disabled persons: the relevant local authority ^{[1, §5.2.4]}. Medical equipment: certified by the Ministry of Health ^{[1, §5.2.5]}. Paintings to an art gallery: the National Art Gallery or state gallery ^{[1, §5.2.6]}. A s34(6)(h)/(ha) contribution: the RGA verifies value against actual eligible expenditure — stock at its cost, a service at the cost of providing it ^{[2, §4.2, §7.1(ii)]}.

Nowhere does "the donor's invoice" or "what a similar item retails for" appear as the valuation method. If a donor hands you a figure and asks you to print it on a receipt as the tax-deductible value, that isn't how any of these provisions work — and a receipt that implies otherwise is a real exposure for your organisation.

e-Invoicing and sponsorship, briefly

LHDN's FAQs for Donations or Contributions (as of 7 July 2025) is direct: "No e-Invoice is required to be issued for donations-in-kind received from donors" ^{[3, Q3]}. E-Invoicing on donations attaches only to money gifts — an in-kind gift sits outside the system entirely. (Full detail: Do we need an e-Invoice for a donation?)

A company that gives money or goods in exchange for its logo on your banner, an event mention, or naming rights isn't making a donation in the tax sense at all — it's buying advertising, a business expense for them, not a gift under any provision above. See temple offerings: donation or sale for the same donation-versus-exchange line applied more generally.

What this means for your organisation

1. Default to "no tax receipt" for in-kind gifts unless the recipient and purpose clearly match s44(6A), (8), (9), (10), (11) or (11C) — and even then, get the value from the named approving body, not the donor.
2. Never let a donor's own valuation appear as a tax-deductible figure. No independent valuation from the body the law names means no tax receipt.
3. Record every in-kind gift in your own books anyway, at a reasonable estimated value — for your accounts, AGM report and auditor, an untracked stack of rice or an unrecorded laptop is a control gap regardless of its tax treatment.
4. Give a plain acknowledgement letter, not a tax receipt, for anything that doesn't qualify — describe the item and its approximate value, and say explicitly it isn't tax-deductible.
5. Point corporate donors wanting a deduction to the s34(6)(h)/(ha) route — make clear it's their application, made before the gift, not something your organisation processes.
6. Separate sponsorship from donation at the point of ask: anything offered in return means it isn't a gift under any of these provisions.
7. Re-check this list periodically — the s34(6)(h)/(ha) guidelines only took effect 15 September 2025, and the Public Ruling on gifts is already in its seventh edition since first published in 2005.