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Zakat vs income tax: how the rebate works
Zakat and income tax are two separate obligations — to the zakat centre and to LHDN — but Malaysian tax law lets zakat paid be subtracted from income tax as a rebate. Not a relief (which reduces chargeable income) but a rebate (which reduces the tax itself, ringgit for ringgit) — until the tax reaches zero. This page explains it in plain language; the figures in the app's examples come from the same engine as e-Filing.
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Checked against official LHDN sources: relief table · rates, deadlines & rules . Checked automatically every day; a change is accepted only after two identical readings. Year of assessment: YA2025.
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Comparison
| Aspect | Zakat | Income tax |
|---|---|---|
| Paid to | The state zakat centre — directly, online or through the employer's salary deduction | LHDN — through PCB, CP500 or a payment after e-Filing |
| Basis | The rules & rates set by the zakat centre on wealth or income that meets the conditions | Chargeable income after reliefs, by LHDN's YA2025 rate table (top rate 30%) |
| When | Any time; what is paid in the basis year counts for that year of assessment | Computed after the year ends — BE e-Filing by 15 May, B by 15 July |
| Effect on tax | A rebate: the zakat amount is subtracted straight from the tax charged, down to zero; any excess is not refunded and not carried forward | Tax is charged after reliefs & rebates; PCB/CP500 paid is subtracted — the balance is paid or refunded |
| Compared with donations | Zakat = a rebate against tax | Donations to approved institutions = a deduction from aggregate income (capped at 10% for certain categories) — not a rebate |
| Proof | The zakat centre's official receipt or the employer's zakat deduction statement | EA form, relief receipts, statements & donation receipts |
| In ListBelanja | A zakat field in the calculator & e-Filing; salary-deducted zakat in the PCB calculator reduces that month's PCB | The whole BE/B computation — the zakat rebate is applied for you in the rebate box |
In plain language
- Work out chargeable income: all income minus reliefs (self, EPF, medical, lifestyle…).
- Compute tax with that year's rate table — this is the "tax charged".
- Subtract rebates: the personal rebate (if chargeable income does not exceed RM35,000) and the zakat paid. If zakat exceeds the tax, the tax becomes zero — the excess is not refunded.
- Subtract PCB & CP500 already paid: a positive balance is paid, a negative one refunded. ListBelanja's tax calculator shows each of these steps with your figures.
Receipts & timing
- Keep the zakat centre's official receipts (zakat on income, wealth, business, fitrah) — scan them into ListBelanja and they are gathered in that year's zakat field.
- Zakat through salary deduction appears on your payslip & EA form; the PCB calculator takes it into account every month.
- What counts is the year of payment, not the year being zakat-assessed: zakat paid at the end of the year counts for that year of assessment.
- Keep them 7 years like other tax records — LHDN can ask for proof of the rebate.
Frequently asked questions
Does zakat fitrah count as a rebate?
Yes — zakat paid to the zakat authority, including fitrah, goes into the zakat rebate box of Form BE/B with the receipt. ListBelanja's calculator has one "Zakat / fitrah paid" field for the year's total.
My zakat is more than my tax — do I get a refund?
No. The zakat rebate reduces tax down to zero only; the excess is not refunded and not carried to the next year. A refund arises only for PCB or CP500 already paid above the final tax.
What about donations & waqf?
Donations to LHDN-approved institutions are a deduction from aggregate income (not a rebate), subject to the 10% cap for certain categories — they reduce chargeable income, not the tax directly. ListBelanja's calculator & e-Filing have separate donation boxes with their caps.