Brief Explanation Relating To Concessions Enjoyed By Institutions/Organizations/Funds Approved By The Director Of Inland Revenue (KPHDN) Under Subsection 44(6) Of The Income Tax Act 1967 (ACP 1967)
- This note aims to provide an explanation regarding concessions enjoyed by institutions/organizations/funds approved by KPHDN under subsection 44(6) of the Income Tax Act 1967. Hopefully this note can help provide understanding and explanations to taxpayers, tax agents, IRBM officials and the public regarding concessions received by institutions/organizations/funds approved by KPHDN.
- There are 3 types of concessions related to KPHDN approval that can be obtained by institutions/organizations/funds, namely:
- Tax exemption on all income received including donations and cash contributions from donors/contributors. The power of this exception is under paragraph 13(1)(a) Schedule 6 of the ITA 1967.
- Donors/contributors are eligible for a deduction (limited to 10% of aggregate income) for cash donations/contributions made to institutions/organizations/funds approved by KPHDN under subsection 44(6) of the ITA 1967. Claim receipts must be kept as evidence because it is necessary reviewed by IRB. While donors/contributors to the government/state government are eligible for deductions equal to the amount donated without limits or restrictions.
- Assets disposed of by institutions/organizations/funds approved by KPHDN are not subject to Property Gains Tax under paragraph 3 (e) Schedule 2 of the Property Gains Tax Act 1975 because the acquisition price is deemed the same as the disposal price. Completion of CKHT 1A is still required for the purpose of this exemption.
DISCLAIMER: This note is intended solely to provide a general explanation of the issues raised. It cannot be used for technical reference purposes regarding factual and legal matters. Treatment of such situations should be in accordance with the provisions of the law and existing guidelines. This note only provides general guidance and explanation for the purpose of understanding as well as awareness.