It's no less or more legal than providing it to a bank when applying for a loan.

The previous SRJK my eldest attended did ask for one, I asked for further clarification as to why they needed to know such information, they gave an explanation that if the parents' income levels were below a certain threshold the school offered free tuition and subsidized the workbooks cost. I told the school I wasn't interested and therefore it was fine if mine wasn't eligible.

Except it became a yearly affair that without fail they would ask and I would have to tell them the same thing.

Best part? IIRC it was in her Std3, there was a form sent asking for donations and recommended a monthly donation that corresponded to our salary and then asked for salary slips as the school wanted to plan in advance how much cash they would be collecting. I told them if they wanted a donation, ask nicely for it and in the end I gave them 0.