SME Info: Understanding TAX (Part 3)

Approved Donation



An approved donation is stipulated under Section 44(6) of the Income-tax, 1967. The gift of money made to the Government, State Government, local authority or an approved institution or organization shall be given a deduction in arriving at total income.

The amount of cash donation to approved institution or organization is to be limited to 10% of the company’s aggregate income for that year.


Example Of Tax Computation Format Would Be:


Tax Rate Of Company


Corporate income tax in Malaysia is applicable to both resident and non-resident companies. Companies are taxed at the 24% with effect from Year of Assessment 2016 while small-scale companies with paid-up capital not exceeding RM2.5 million are taxed as follows:



Tax Rate For Sole Proprietorship Or Partnerships



The tax rate for sole proprietorship or partnership will follow the tax rate of an individual. In the case of sole proprietorship, business chargeable income is his or her individual income.

Whereas in partnership the chargeable income is divided among the partners as an individual. As an individual, sole proprietor or partner are entitled to the following reliefs;


The total relief available are then set off against the total income/chargeable income from the business to arrive at chargeable income which is taxable according to the tax rates:


--To Be Continued


(Credit to Understanding Tax - Tax Act 1967, SMEinfo)


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