Zakat you pay to a state zakat body in Malaysia is deducted ringgit for ringgit from your income tax, not from your taxable income. Subsection 6A(3) of the Income Tax Act 1967 gives every resident individual with chargeable income a rebate for zakat, fitrah and other obligatory Islamic dues paid to a religious authority established under written law, capped at the total income tax charged for the year. LHDN's Public Ruling 3/2023 adds the conditions: an official receipt from a body such as PPZ-MAIWP or a state Majlis Agama Islam, each spouse claims only their own payments, and any excess is neither refunded nor carried forward. For the underlying calculation of what you owe, start at the zakat hub.
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Rebate versus relief: why zakat is worth more than any relief
A relief reduces the income on which tax is calculated. A rebate reduces the tax itself. LHDN's own rebate page lists zakat and fitrah under Other Tax Rebates, subject to the maximum of tax charged, alongside the RM400 individual rebate for chargeable income below RM35,000 and the departure levy rebate for umrah travel. That placement is the whole story: zakat sits in the same box as a direct cash credit, after the tax has already been worked out on your chargeable income.
| Feature | Tax relief (e.g. EPF, lifestyle) | Zakat rebate under 6A(3) |
|---|---|---|
| What it reduces | Chargeable income | Income tax charged |
| Value of RM1,000 claimed | RM1,000 times your marginal rate | RM1,000 off tax, up to tax charged |
| Cap | Fixed amount per relief category | Total income tax charged for the year |
| Unused amount | Lost | Lost; no refund, no carry forward |
| Evidence | Receipts on request | Official zakat receipt from a lawful authority |
LHDN's Public Ruling 3/2023 illustrates the cap with a taxpayer named Zahid: income tax charged of RM570, an individual rebate of RM800 for himself and his wife, and a zakat rebate of RM825, giving tax payable of nil. The excess of RM1,055 cannot be refunded or carried forward as a credit against later years. A ruling example with a higher earner, Rafiq, shows tax charged of RM12,380 reduced by a zakat rebate of RM2,000 to RM10,380 payable. The rebate therefore only has value to the extent you actually have tax to pay.
Which payments qualify
The subsection covers zakat, fitrah or any other Islamic religious dues that are obligatory and paid to an appropriate religious authority established under any written law. LHDN's FAQ for individuals answers the follow-up question directly: zakat for this purpose means all types of zakat payments made in a calendar year, so income zakat, savings zakat, gold zakat, business zakat paid as an individual and fitrah all count. PPZ-MAIWP's page on zakat and tax adds that qada zakat, payments made to settle zakat missed in earlier years, also qualifies.
The phrase established under written law is the gatekeeper. PPZ-MAIWP, Lembaga Zakat Selangor and the other state Majlis Agama Islam bodies all qualify. Public Ruling 3/2023 gives the counter-example of a Johor taxpayer who paid RM4,900 to Pusat Pungutan Zakat Johor Bahru and RM1,940 to Majlis Ugama Islam Singapura: only the Johor payment was allowed, because the Singapore body is not established under any written law in force in Malaysia. The 2018 version of the ruling made the same point about an Australian zakat centre. Money given directly to a needy person, to a mosque or to an NGO, however sincere, does not generate a rebate.
Husband and wife: separate and joint assessment
Paragraph 5.6.4 of Public Ruling 3/2023 sets the rule. Under separate assessment, each spouse claims a rebate for the zakat they paid themselves. Under joint assessment, only the spouse in whose name the assessment is raised may claim a rebate, and only for zakat that spouse paid; zakat paid by the other spouse is not allowed against the assessed spouse's tax. Zakat paid by a spouse who is unemployed or has no total income is also not allowed as a rebate against the earning spouse.
The ruling's example of Aimin and Sofia makes the loss concrete. Sofia's zakat of RM1,000 was allowed against her own tax. Aimin, who had no total income that year, paid RM250 of zakat that produced no rebate for anyone. The planning point is obvious once you see it: in a single-income household, the earning spouse should be the one who pays the family's zakat and whose name is on the receipt. For an overview of how household money is best arranged for Shariah and tax purposes, our estate planning hub covers hibah and nomination between spouses.
Monthly: adjusting PCB for zakat deducted at source
You do not have to wait until April to benefit. PPZ-MAIWP's zakat and tax page explains that an employer may remit part or all of an employee's monthly tax deduction (PCB) to the zakat body as the employee directs, adjusting PCB downward by the monthly zakat deducted. Its examples: PCB due RM100 and monthly zakat RM70 leaves PCB of RM30; PCB due RM50 and monthly zakat RM70 leaves PCB of nil. Lembaga Zakat Selangor publishes a monthly deduction schedule by salary band and dependants so that payroll can apply a fixed figure.
In practice you enrol in the salary deduction scheme, give payroll the authorisation, and ask that the PCB computation reflect it. At year end the total zakat deducted appears on the zakat body's annual statement and you enter it in the rebate section of Form BE; LHDN's explanatory notes list zakat and fitrah there under subsection 6A(3). If payroll did not adjust PCB during the year, the rebate simply arrives as a refund after assessment instead of as higher take-home pay each month. How income zakat is computed in the first place is covered in our guide to zakat on income and savings.
Companies and businesses: a deduction, not a rebate
The treatment flips for business zakat paid by a company. PPZ-MAIWP's page states that the tax deduction on business zakat paid by companies, co-operatives and trust bodies is subject to a maximum of 2.5% of aggregate income, and that for Labuan offshore companies the rebate is limited to 3% of net profit. That is a deduction from income, so its value to the company is the corporate tax rate multiplied by the zakat, not the full amount. A sole proprietor is still an individual and claims under 6A(3) as a rebate.
We did not locate a current LHDN page restating the corporate figures on the day we checked, so treat the PPZ-MAIWP statement as the published position and confirm the ceiling with your tax agent before relying on it. Business owners deciding whether to pay zakat personally or through the company should note that the personal rebate is worth more per ringgit than the corporate deduction, subject to the personal tax charged cap. The business owners' overview on this site lists the Islamic financing and zakat questions that arise for SMEs.
How to claim: the receipt, the form and the records
- Pay to a lawfully established zakat body: PPZ-MAIWP, Lembaga Zakat Selangor or your state Majlis Agama Islam, online or through salary deduction, in the name of the person who will claim.
- Keep the official receipt or annual statement; Public Ruling 3/2023 says the claim must be evidenced by an official receipt from the authority.
- Add up every type of zakat and fitrah paid in the calendar year, including qada zakat, because LHDN's FAQ treats all zakat paid in the year as one figure.
- Enter the total in the rebate section of Form BE (or Form B for business income) during e-Filing; the figure goes after tax charged, not among the reliefs.
- Check that the rebate does not exceed tax charged; any excess is lost, so there is no benefit in overstating.
- Retain receipts for audit; LHDN can ask for them after assessment.
Timing: the calendar year, not the haul
Your zakat haul might end in Ramadan or on the anniversary of your first salary. LHDN does not care: the rebate attaches to zakat paid in the basis year, 1 January to 31 December, for that year of assessment. A payment on 2 January counts for the following year. If you normally settle savings zakat in Ramadan and Ramadan falls late in the year, that is fine, but if you are paying a large sum and the date is flexible, pay it before 31 December of a year in which you have tax to absorb it.
The cap also creates a mild asymmetry worth planning around rather than resenting. A taxpayer whose tax charged is RM1,500 and whose zakat is RM4,000 loses RM2,500 of rebate. That is not a reason to pay less zakat, which is owed regardless, but it is a reason to spread discretionary payments such as qada zakat across years if your tax position varies, and to put the receipt in the name of the higher-taxed spouse where the money is genuinely shared. Investment-related zakat is covered in zakat on investments.
Verdict: what to do with this
If you are a salaried employee with tax to pay, enrol in salary deduction with your state zakat body, have payroll net it against PCB, and claim the annual statement as a rebate. Your zakat then costs you nothing beyond the tax you would have paid, which is exactly what the 1992 fatwa asked the Inland Revenue to arrange.
If you are married with one income, put every zakat payment in the earner's name. If you run a company, understand that corporate zakat is a capped deduction and personal zakat is a full rebate, and choose deliberately. If your tax charged is small, pay your zakat anyway and accept that the rebate is a bonus, not the reason. Facts checked against hasil.gov.my, zakat.com.my, zakatselangor.com.my on 1 October 2026.
Frequently asked questions
Is zakat a tax relief or a tax rebate in Malaysia?
A rebate. Subsection 6A(3) of the Income Tax Act 1967 deducts zakat, fitrah and other obligatory Islamic dues from the income tax charged, not from chargeable income. LHDN's rebate page lists it under Other Tax Rebates, subject to the maximum of tax charged. RM1,000 of zakat therefore removes RM1,000 of tax, as long as you had at least that much tax to pay.
What happens if my zakat is more than my income tax?
The rebate is limited to the total income tax charged for the year, and LHDN's Public Ruling 3/2023 states that any excess cannot be refunded or carried forward to later years. In the ruling's example, a taxpayer with tax charged of RM570 and combined rebates of RM1,625 paid no tax and lost the RM1,055 difference. Pay zakat in full regardless; the cap affects only the tax benefit.
Can I claim zakat paid to a mosque or directly to the poor?
No. The rebate applies only to payments made to an appropriate religious authority established under written law, such as PPZ-MAIWP, Lembaga Zakat Selangor or a state Majlis Agama Islam, and must be evidenced by their official receipt. Public Ruling 3/2023 disallows even zakat paid to Majlis Ugama Islam Singapura because it is not established under Malaysian law.
Can my husband claim the zakat I paid, or vice versa?
Under separate assessment, each spouse claims only the zakat they personally paid. Under joint assessment, only the assessed spouse may claim, and only for their own payments; zakat paid by a non-earning spouse gives no rebate to anyone. These rules are in paragraph 5.6.4 of Public Ruling 3/2023. In a single-income household, make the payment in the earner's name.
Can zakat reduce my monthly PCB instead of waiting for a refund?
Yes. PPZ-MAIWP's zakat and tax page says an employer may remit part or all of your PCB to the zakat body under a salary deduction scheme and reduce that month's PCB by the zakat deducted, down to zero. Enrol through your state zakat body and give payroll the authorisation. The annual statement then supports your rebate claim at filing time.
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Does a company get a rebate for business zakat?
No, it gets a deduction. PPZ-MAIWP states that business zakat paid by companies, co-operatives and trust bodies is deductible up to 2.5% of aggregate income, and that Labuan offshore companies are limited to 3% of net profit. Because a deduction reduces taxable income rather than tax, it is worth the corporate tax rate multiplied by the zakat, not the full amount. Confirm current ceilings with LHDN.
