In addition to deducting tax relief from your annual income, you can still reduce your chargeable income with tax deductions.

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A tax deduction is similar to a tax relief, where it reduces your chargeable income. Tax deductions are a result of Gifts and Donations.

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Donations are only tax deductible if they are made to a Government approved charitable organisation or directly to the Government; and you must keep the receipt of the donation.

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For income tax 2019, if your chargeable income is RM55,000, and you’ve donated RM2,500 to an approved charitable organisation, you are allowed to deduct 7% of your aggregate income to reduce your chargeable income.