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Straight answers on giving in Malaysia
Tax relief, receipts, e-Invoices, PDPA and fundraising rules — researched from LHDN, SSM, ROS and other primary sources, and re-checked on a schedule.
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Is my donation tax-deductible? How to check before you give
Not automatically. A gift only qualifies for a tax deduction if two things are true at once: the organisation holds current approval from LHDN under subsection 44(6) of the Income Tax Act 1967 — the LHDN approval that makes a gift deductible — and it covers the specific fund you're giving to [1][2]. It also has to be a genuine gift, money with nothing specific expected back, not payment for a meal, a ticket, a tablet, or anything else [3]. Even then, it's a deduction against your income, not a refund, capped at 10% of your aggregate income for the year [1][2]. Zakat and fitrah work differently again, as a rebate rather than a deduction [4]. Check before you give by asking the organisation directly, or looking them up on LHDN's own website [1].
What must be on a valid donation receipt in Malaysia? A checklist for NPOs
What makes a receipt valid for a donor's tax deduction is that (1) your organisation holds current approval from LHDN under subsection 44(6) of the Income Tax Act 1967 for the fund the donation went to, and (2) the receipt itself carries what LHDN's own current guideline requires of every approved organisation, plus anything extra your specific approval letter adds. That guideline, dated 23 October 2025, publishes a general receipt checklist — organisation details, a unique preprinted serial number, the donor's full particulars, the amount and date, the collector's position, and a fixed reference to your approval — which this article walks through in full below [1][2]. A donation to an organisation without 44(6) (or an equivalent) approval, or to a fund your approval doesn't cover, cannot be issued as tax-deductible at all — you can still give the donor an ordinary receipt as proof of payment, just not one that lets them claim a deduction.
How do I claim tax relief for my donations when I file my taxes?
You can only claim a donation as a tax deduction if the organisation you gave to holds current LHDN approval under subsection 44(6) of the Income Tax Act 1967 for the fund your gift went to [1][2]. If it does, your deduction is capped at 10% of your aggregate income for the year, shared with a few related categories rather than given fresh for each, and it reduces the income you're taxed on, not your tax bill directly — a RM2,000 gift doesn't come back as RM2,000 [2][3]. On Form BE, donations sit in Part F ("Donations / Gifts / Contributions"), separate from your personal reliefs, and e-Filing applies the 10% cap automatically [4]. Zakat and fitrah are claimed differently — as a rebate, not a deduction [4]. Keep your receipt: LHDN's e-Filing guidance says seven years from the end of the year you filed that return [4].
Do we need an e-Invoice for a donation, or is our LHDN receipt still enough?
It depends on what kind of organisation you are, on your annual turnover, and the answer has changed twice in the last year. If you are a religious institution or organisation set up exclusively for worship or advancing religion, LHDN's own rules currently exempt you from issuing e-Invoices for donations you receive [1] — your existing receipt can carry on unchanged. If your organisation also holds LHDN tax-exempt approval for a separate charity or community project, or you are a non-religious NPO with that approval, this donation-specific exemption does not apply to you [1] — but a separate, general exemption may still cover you: taxpayers of every kind with annual turnover or revenue under RM3,000,000 are currently exempt from e-Invoicing altogether, donations included [2]. Whether that covers your organisation depends on your own turnover, not on your s44(6) or 34(6)(h) status — see "The general small-taxpayer exemption" below.
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Accounting & Reporting
Getting donation income ready for the AGM and the auditor
What your organisation must show at the AGM, and to an auditor, depends on how you are registered.
How long must our NPO keep donation records — and what can we throw away?
For tax purposes, keep your donation and financial records for 7 years — that duty comes from the Income Tax Act 1967, and it applies to your organisation whether or not you're a company.
Month-end for donation income: a reconciliation routine your treasurer can actually keep
No law tells you to close your books every month — but the Societies Act and the Companies Act both expect accounts that "sufficiently explain" your transactions, and you can't produce that at year-end if January's…
Restricted vs unrestricted donations: keeping earmarked money where donors meant it
Malaysia has no accounting standard written for NPOs, and "restricted" and "unrestricted" funds are not Malaysian legal terms — they're borrowed from foreign charity-accounting practice.
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