General Explanation Of The Use Of Donation Receipts For Institutions / Organizations / Funds Approved By The Director Of Inland Revenue (KPHDN) Under Subsection 44(6) Of The Income Tax Act 1967 (ACP 1967)
- Taxpayers who make contributions and donations to the government, state government or a local authority , or to an institution or organization that has been approved under subsection 44(6) of the ITA are eligible to get a deduction for their contributions and donations in the calculation of aggregate income.
- Types of tax relief:-
- Donations or contributions to the Federal Government, State Governments and Local Governments are equal to the amount of donations and contributions and must be proven with a Kew-38 Receipt.
- Donations or contributions under the approval of the Director General, the amount is limited to 10% of aggregate income to individuals and companies
- IRBM recognizes 2 types of receipts for tax deductions under the provisions of subsection 44(6) of the ITA, namely Financial Receipt 38 (Kew-38) and KPHDN approval receipt. Kew-38 receipts are donations to government / state governments, local governments while KPHDN approval receipts are receipts from institutions / organizations / funds that have granted KPHDN approval under subsection 44(6) of the ITA.
- Only cash donations supported by official receipts are eligible for deduction. In kind donations such as food, clothes, computers and so on are not eligible for tax deduction and tax deduction receipt cannot be issued
- Taxpayers need to keep the receipts as evidence for LHDNM review if needed
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