What is s44(6) approval, and how does our NPO get it?

See Fundraising in Malaysia: the rules that actually apply to your NPO for how 44(6) fits alongside registration, e-Invoicing and collection permits.

"Are we 44(6) approved?" — the question every donor eventually asks

Sooner or later, a donor asks your treasurer whether their gift is tax-deductible, and the honest answer depends on a single fact: does your organisation currently hold subsection 44(6) approval, and is the specific donation covered by it? Being a registered society, being obviously charitable, or having applied years ago are not the same as holding current approval.

Subsection 44(6) of the Income Tax Act 1967 lets a donor deduct a gift of money made to "the Government, a State Government, a local authority or an institution or organization or a fund, approved for the purposes of this section by the Director General" — capped at 10% of the donor's aggregate income for the year ^{[4, s44(6)]}. LHDN's own overview is direct about this: approval is "given based on application and not automatically," granted "based on a complete application that meets the specified conditions" ^{[1, paras 2, 4]}.

Practical tip: put "confirm current 44(6) status" on your AGM checklist, not just your fundraising one. Committees rotate; the approval letter doesn't always rotate with them.

Who can apply, and what the guideline actually checks for

The pain here is a well-meaning committee applying for something they don't qualify for, and finding out months later.

To apply, your entity must first be legally established in Malaysia and registered with SSM (a company limited by guarantee, or a fundraising-licensed company), ROS, BHEUU, or another recognised registrar ^{[2, §2.1]}. Haven't settled on an entity type yet? See Society vs Company Limited by Guarantee — that decision sits upstream of this one. A fund ("tabung") is a separate route for a founding body whose own objects are too broad to qualify directly — the fund becomes the approved entity, distinct from its founder ^{[2, §§2.2.3, 3.1.3]}.

The activities also have to fall inside the list in subsection 44(7) of the Act: hospitals, public/benevolent institutions, universities and other educational institutions, medical research bodies, technical/vocational training, and public or private funds run solely for education, relief of hardship among Malaysian citizens, religious worship or advancement of religion, museums/galleries/culture, animal welfare, environmental conservation, and a handful of other named categories ^{[2, §2.2; 4, s44(7)]}. The current guideline explicitly does not cover places-of-worship or school funds, or hospital welfare funds — those run under their own separate LHDN guidelines ^{[2, §1.4]}. If your fund is specifically for building, buying or running a house of worship, check which guideline actually applies before you start; don't assume the general one does.

The guideline also sets threshold conditions before KPHDN will consider an application at all:

• At least 24 months of prior operation, so there's a track record and filed accounts to review ^{[2, §3.5.1]}.
• More than 50% of your board or committee must be "outsiders" — no family, employment or ownership connection to the founder or each other. This general rule applies whether you're registered with SSM, BHEUU or ROS/JPPM, with only the "not a registered member" sub-test varying by registrar ^{[2, §3.3.1]}. A fund's own AJK is different again, keyed to its founder's registrar: at least 30% outsiders if founded by a ROS/JPPM-registered body, more than 50% if founded by an SSM-registered company limited by guarantee — no BHEUU-specific fund threshold is stated ^{[2, §3.3.2]}.
• Benefits must go to the general Malaysian public, not a narrow group defined by ethnicity, religion, politics or locality, and be free or genuinely below market rate ^{[2, §3.2.3–3.2.5]}.
• No benefit to founders, board/committee members or their families beyond reimbursement of official expenses ^{[2, §3.2.6–3.2.9]}.

Practical tip: if your committee currently includes several family members or long-serving founders who also sit on the board, work out your "outsider" percentage before you apply — it's one of the more common reasons an application stalls.

Preparing the application pack

The pain here: someone has to assemble a folder, and nobody's sure what belongs in it.

Applications go through LHDN's e-Derma system on MyTax, or manually ^{[2, §4.1]}, as a formal written letter on official letterhead from your President, Chairman, Director, Secretary, or an appointed representative or tax agent ^{[2, §4.2–4.3]}. The guideline lists a supporting-document appendix by entity type — SSM, ROS/JPPM, BHEUU/other, or a fund — plus extra documents for a care centre for the elderly, orphans or persons with disabilities ^{[2, §4.4–4.5]}. LHDN's FAQ adds one more item: a recently-dated letter of support from the relevant government ministry, department or agency — for example, Social Welfare if your objects are relief of poverty ^{[3, Q14]}.

Complete and sign the checklist that accompanies the guideline — an incomplete application isn't processed ^{[2, §4.6]} — and submit to the Director General of Inland Revenue, Tax Policy Department, Menara Hasil, Cyberjaya ^{[2, §4.7]}.

If approved, KPHDN issues a letter stating your approval number, period, effective date, responsibilities and any special conditions ^{[2, §4.8]}. Before you can issue a receipt donors can claim against, you must also submit a draft receipt format for KPHDN's separate approval — in Malay or bilingual, showing your name and address, a unique pre-printed serial number, the date, the donor's full particulars, the amount, and the collector's position ^{[2, §4.9]}. LHDN's FAQ confirms this: "the draft format of the donation receipt needs to be submitted to the Approval and Monitoring Division for approval before it can be used" ^{[3, Q24]} — issuing it digitally rather than as a pre-printed book needs its own separate written application, case by case ^{[3, Q28]}. (See What must be on a valid donation receipt? for the fields a receipt needs regardless of tax status.)

Practical tip: you're allowed to keep fundraising while your application is pending — you just can't issue a 44(6) receipt for those gifts yet, and the income stays taxable until approval comes through ^{[3, Q6]}. Don't promise donors a tax deduction before the approval letter and the receipt-format sign-off both exist.

Approval also brings a separate obligation: e-Invoicing applies to a 44(6)-approved IOT's donation receipts, phased in on the e-Invoice Guideline's own timeline ^{[2, §4.10]} — a distinct compliance track from 44(6) itself. See Do we need an e-Invoice for a donation? for the current thresholds and their version history.

What approval actually gives you — and what it doesn't

Once approved, two distinct benefits apply:

1. Your own income is exempt from tax, under paragraph 13(1)(a) of Schedule 6 to the Act — "so long as the approval remains in force" ^{[4, Sch 6 para 13(1)(a)]}. That qualifier matters: the exemption tracks the approval, not the organisation's charitable character in general.
2. Your donors can deduct their gift, up to 10% of their own aggregate income for the year, and only for a gift of money — not goods, not a ticket or product purchase, and not a gift with any condition attached ^{[2, §3.4; 4, s44(6)]}. A receipt is only eligible to issue if the donor gives their full particulars first — for an individual, name plus current IC or passport number and full address; for anyone else, name plus registration number and address ^{[2, §5.6]}. No complete particulars, no 44(6) receipt. See How much can donors deduct? for the deduction limit in full.

If KPHDN refuses or withdraws your organisation's own application or approval, you — not your donors — have 30 days from being informed of the decision to appeal to the Minister; a donor has no separate appeal right of their own under this provision ^{[4, s44(6B)]}.

Staying approved: the conditions nobody reads until an auditor asks

The pain shows up at year-end, when the auditor asks "are we still compliant?", and nobody can answer with more than "we think so."

The main ongoing conditions in the current guideline ^{[2, Part B]}:

• Spend at least 50% of last year's income on your objectives this year (rising to 60% if you use more than 25% of your accumulated funds for a permitted business activity) — rent, depreciation, capital expenditure and administrative/operational staff salaries don't count toward that 50%/60% ^{[2, §5.10.1(c)–(d)]}. There's a specific carve-out, though: salary or wages paid to teaching staff for an education programme helping underprivileged students does count as objective expenditure ^{[2, §5.10.1(e)]}. LHDN's FAQ states employee salaries and wages as eligible more broadly ^{[3, Q31]} — that's wider than the guideline's own wording, so where the two differ, this article follows the guideline's more specific rule. LHDN will consider a written application explaining non-compliance for a specific year on its merits — it doesn't automatically revoke approval ^{[3, Q30]}.
• Get KPHDN's written approval before: acquiring or disposing of land, buildings, plant, machinery or vehicles (any amount) or other assets/modifications above RM20,000, changing your board/committee membership, amending your constitution or trust deed, or changing your registered address ^{[2, §5.8.1–5.8.6]}.
• Get the Ministry of Finance's written approval (with a copy sent to KPHDN) before running any activity overseas — a fund (tabung) isn't permitted to run overseas activity at all ^{[2, §5.9]}.
• Submit audited financial statements, your BNCP tax return and tax computation every year. The guideline's own deadline table sets this at 30 April for a Pertubuhan ("F" file) with no business income, 30 June if it has business income, and, separately, within 7 months of the accounting period's close for a "C" (company/SBMJ) file — stated there as the standard deadline, not an extension ^{[2, §5.12.1]}. LHDN's FAQ describes the 7-month figure differently, as something a C-file entity "can apply for" ^{[3, Q20]} — this article follows the guideline's own table as the more authoritative statement, and flags the discrepancy rather than picking one silently. Separately, the FAQ's 31-March extension-request mechanism applies to the general 30 April deadline, not the C-file rule ^{[3, Q26]}. Also submit a list of donors who gave RM20,000+, a beneficiary list, and an activity list for the year ^{[2, §5.14]}.
• Keep every record available for KPHDN on request ^{[2, §5.15]}.

A reminder with teeth: from year of assessment 2024 onward, breaching a condition gets you taxed for that specific year — even while your approval letter is otherwise still in force ^{[2, §12]}. KPHDN can also withdraw approval outright at its discretion ^{[2, §7.4]}.

Practical tip: calendar whichever deadline applies to your file type (30 April, 30 June, or the C-file 7-month window) alongside your ROS/SSM annual return — separate obligations to separate regulators — and keep your RM20,000+ donor list current through the year rather than reconstructing it each January.

Approval period and renewal — what the guideline actually says

This is the open question every committee eventually hits. Here's what LHDN's own guideline states, rather than the "6–12 months" figure that circulates informally (no primary-source backing, and not repeated here):

• The approval period KPHDN grants can run up to five years ^{[2, §8]}.
• To renew, apply in writing within the six months before your current approval period ends, attaching updated versions of the same supporting documents you originally submitted ^{[2, §9.1]}. LHDN's FAQ confirms the same six-month window ^{[3, Q19]}.
• Renewal isn't automatic — KPHDN reviews your compliance record against your previous approval conditions, alongside the updated documents, before deciding ^{[2, §9.2]}.

What the guideline does not state is how long KPHDN takes to decide an application. This article makes no claim about processing time — confirm that directly with LHDN's Tax Policy Department when you apply.

Practical tip: treat "six months before expiry" as the latest acceptable start, not the target. Gathering updated audited accounts, an updated constitution (if changed) and your compliance record takes real time — start earlier if you can.

"Tax-exempt" isn't always "44(6) approved"

A committee member hears "we're tax-exempt" and assumes every donation qualifies for a deduction. Schedule 6 contains more than one exemption, and they're not interchangeable:

• Paragraph 13(1)(a) exempts the income of an institution, organisation or fund approved under subsection 44(6) — the approval this article is about ^[4].
• Paragraph 13(1)(b) separately exempts a religious institution or organisation's income from contributions received for charitable purposes, provided it's non-profit and established exclusively for religious worship or advancement of religion — no 44(6) approval needed for this specific exemption ^[4]. It's about your own income being untaxed; it says nothing about a donor deduction.
• Paragraph 13(1)(c) covers a wakaf or endowment's income under the separate subsection 44(11D) route — outside the scope of this article ^[4].

In short: your own income might be exempt under more than one route, but a donor can only deduct their gift where 44(6) approval specifically applies to your organisation and covers that donation.

What this means for your organisation

1. Confirm your current 44(6) status from your approval letter, not assumption — check the approval period and expiry date specifically.
2. Work out which guideline applies to you — general institutions/organisations/funds, or a separate one for a place-of-worship, school or hospital welfare fund ^{[2, §1.4]}.
3. Check your board composition against the "more than 50% outsiders" test before you apply or renew.
4. Get your receipt format formally approved by KPHDN — apply separately for a digital rather than pre-printed receipt.
5. Calendar your file type's filing deadline for audited accounts and your BNCP (30 April, 30 June, or the C-file 7-month window), separately from your ROS/SSM annual return.
6. Start your renewal well before the six-month deadline, with updated supporting documents and a clean compliance record.
7. Never issue a 44(6) receipt for goods, a product sale, a ticket, or a gift with strings attached — only unconditional cash gifts qualify.