I got some non-moving old stocks in my shop which the condition is still good, would like to donate it to the charity (which is eligible for tax relief).
I've read through LHDN website and found this

- Act 44 (9) There shall be deducted pursuant to this subsection
from the aggregate income of a relevant person who is an
individual for the relevant year reduced by any deduction for
that year in accordance with subsection (1) an amount equal to
any gift of money or contribution in kind ( the value to be
determined by the relevant local authority ) made by him in the
basis year for that year for provision of facilities in public
places for the benefit of disabled persons.

Does it means with donating RM10000 worth of stocks , I can get tax relief of 10k?

Please advise. Thanks..


If not possible to get tax relief, does it benefits my account in anyway? The stocks are place consuming and outdated, no point giving FOC to customer because I think they won't appreciate it. To the poor it might just be good enough.

This post has been edited by ccheng0085: Jun 25 2015, 10:14 AM

i think donation is kinda tricky, if not mistaken they cap at certain % of ur aggregate income and then you must donate to those approved by government -.- meaning if u donate to those temple , church or any poor ppl on street u are not entitle to claim if not mistaken.

yes it does helps ur accounts a bit becoz in theory there is a 'holding cost' for ur stocks... u need place, ppl guard it, insurance, all kind of expenses.

Can bah and got bah.

Last time i donate for the Tsunami via online. I got the tax relief.
Because i donate usd. Paypal

yup. only those approved by government, and locally only... organization like "world vision" not qualified bcoz it's international... lol..

cap at certain % is not a problem... the problem is how to out the stock? Do I need to prepare an invoice? Or just a letter for the organization to sign upon receiving my items, just to confirm they received the goods? If let say I consult the said organization for PLAN A, then LHDN say need to do in PLAN B instead, then pening sia....

Just assume after donation, then the goven FFK me say cannot, then is there a way to manage my account for the stock lost?

i think those approved organisation will have tax receipts or something like tat as evidence for u to claim later on. but please be sure to value ur stock at cost of purchase, not selling price of ur company. so better staple this receipt and ur supplier invoice just in case in future lhdn want u to prove lol. accounts ? it show as donations too, just tat during tax computation u will add it back same as disallowed expenses.

Before donation
Sales 100,000
Opening stock (1,000)
puchase (90,000)
closing stock 10,000

Gross profit 19,000


after donation u need to take out from purchase/openning stock and closing stock, assume u donate rm1,000 worth.

sales 100,000
openning stock (1,000) <if it was purchase last year, reduce from here
purchase (89,000) < i assume u purchase this year, so i minus off from there
closing stock 9,000

Gross profit 19,000
Dontation (1,000)
net profit 18,000

check out the link for organization that approved by LHDN

http://www.hasil.gov.my/goindex.php?kump=2...1&unit=8&sequ=1

very useful link

This post has been edited by nexona88: Jun 25 2015, 12:48 PM

thanks bro. very helpful information.

Are you GST registered? If yes, does the RM 500 gift rule applies?

you are welcome, try to search around which organisation need ur stuff. coz i remember those around KL has over supply whereby those in rurals area are in shortage of lots of stuff.

not registered. sry bro

me myself stays in rural place... here don have unifi ....

I won't consider donating to big cities la... here in Sabah need my help.. ^^

dun talk about unifi, hate it ... my new house doesnt even have phone line and my friend always tease me 'you move into forest already ar, how come no phone line? ada electric ke?' yeah big cities normally will have over supply.

I heard someone new row of houses across the fence from TM also got no line. Hope that makes you feel a bit better.

omg, that really makes me feel a little bit better.. but i have waited for maybe 1 year + ed ...

Got capping

do you mean limited to 10 % of total income?

Net profit + non allowable expenses - double deduction = adjusted income
adjusted income - capital allowance + balancing charge = statutory income
statutory income - business loss b/f + other income = aggregate income
aggregate income - current year business loss = total income
TOTAL INCOME - approved donation = CHARGEABLE INCOME

THIS.

No receipt no relief.