s 44 Total income
(1) The total income of a person for a year of assessment (that person and year of assessment being in this section referred to as the relevant person and the relevant year respectively) shall consist of the amount of his aggregate income for the relevant year reduced— (a) first, by any deduction falling to be made for the relevant year pursuant to subsection (2); (b) next, by any deduction falling to be so made pursuant to Schedule 4 or 4B ; (c) next, by any deduction falling to be so made pursuant to subsection (6) or (6 A ); (d) next, by any deduction falling to be so made pursuant to subsection (8), (9), (10), (11) or (11A); and (e) thereafter, by any deduction falling to be so made pursuant to section 44 A. (2) Subject to subsections (3) and (5), there shall be deducted pursuant to this subsection from the aggregate income of the relevant person for the relevant year the amount of any adjusted loss from a source of his for the basis period for the relevant year or, where there is an adjusted loss from each of two or more sources of his for the appropriate basis period for each source for the relevant year, the aggregate of the adjusted loss from each of those sources for its appropriate basis period for the relevant year. (3) For the purposes of subsection (2), where in relation to a source the basis period for the relevant year overlaps the basis period for the immediately preceding year of assessment, the amount of the adjusted loss from that source for the basis period for the relevant year shall be taken to be reduced by a sum which bears the same proportion to that amount as the length of the period of the overlap bears to the length of the basis period for the relevant year and the amount of that loss as so reduced shall be taken to be the amount of the adjusted loss from that source for the basis period for the relevant year. (4) Where the relevant person has no aggregate income for the relevant year, there shall be ascertained for the purposes of section 43 the amount of any adjusted loss from a source of his for the basis period for the relevant year or the aggregate of any adjusted loss from each of his sources for its appropriate basis period for the relevant year, as the case may be, which would have fallen to have been deducted pursuant to subsection (2) but for the absence of aggregate income. (5) Where the amount referred to in subsection (4) exceeds the relevant person’s aggregate income for the relevant year, so much of that amount as is equal to that aggregate income shall be deducted pursuant to subsection (2) and there shall be ascertained for the purposes of section 43 the amount of that excess. (5 A ) The amount ascertained under subsection (4) or (5) for any relevant year in respect of a company shall be disregarded for the purposes of section 43 unless the Director General is satisfied that the shareholders of that company on the last day of the basis period for that relevant year in which such amount is ascertained were substantially the same as the shareholders of that company on the first day of the basis period for the year of assessment in which such amount would otherwise be deductible under that section and such amount disregarded shall not be allowed as a deduction in subsequent years of assessment. (5B ) For the purpose of subsection (5A )— (a) the shareholders of the company at any date shall be substantially the same as the shareholders at any other date if on both those dates— (i) more than fifty per cent of the paid-up capital in respect of the ordinary share of the company is held by or on behalf of the same persons; and (ii) more than fifty per cent of the nominal value of the alloted shares in respect of ordinary share in the company is held by or on behalf of the same persons; and (b) shares in the company held by or on behalf of another company shall be deemed to be held by the shareholders of the last mentioned company. (5C ) In subsection (5 B ), “ordinary share” means any share other than a share which carries only a right to any dividend which is of— (a) a fixed amount or at a fixed rate per cent of the nominal value of the shares; or (b) a fixed rate per cent of the profits of the company. (5 D ) Where there is a substantial change in the shareholders of a company referred to in subsection (5A ), the Minister may under special circumstances exempt that company from the provisions of that subsection. (6) Subject to subsection (12), there shall be deducted pursuant to this subsection from the aggregate income of a person for the relevant year reduced by any deduction falling to be made for that year in accordance with subsection (1) an amount equal to any gift of money made by him in the basis year for that year to the Government, a State Government, a local authority or an institution or organization approved for the purposes of this section by the Director General on the application of the institution or organization concerned: Provided that the amount to be deducted from the aggregate income of a company for the relevant year in respect of any gift of money made by that company to any institution or organization approved for the purposes of this section by the Director General shall not exceed five per cent of the aggregate income of the company in the relevant year. (6 A ) Subject to subsection (12), there shall be deducted pursuant to this subsection from the aggregate income of a person for the relevant year reduced by any deduction falling to be made for that year in accordance with subsection (1) an amount equal to the value, as determined by the Department of Museum and Antiquities or the National Archives of any gift of artefact, manuscript or painting made by him in the basis year for that year to the Government or State Government. (7) In subsection (6)— “institution” means an institution in Malaysia which is not operated or conducted primarily for profit and which is— (a) a hospital; (b) a public or benevolent institution; (c) a university or other educational institution; (d) a public authority or society engaged solely in research or other work connected with the causes, prevention or cure of disease in human beings; (e) a Government-assisted institution engaged in socioeconomic research; or (f) a technical or vocational training institution; “organization” means an organization in Malaysia which is not operated or conducted primarily for profit and which is— (a) an organization established and maintained exclusively to administer and augment a public or private fund established or held for the sole purpose of the establishment, enlargement or improvement of an institution or solely for the provision of a scholarship, exhibition or prize for an individual for educational work, research work or other similar work in an institution or in what would be an institution if it were in Malaysia; (b) an organization established and maintained exclusively to administer and augment a public fund established or held solely for the relief of distress among members of the public; (c) an organization established and maintained exclusively to administer and augment a fund established and held solely for the construction, improvement or maintenance of a building in Malaysia which— (i) is intended to be used (and, when constructed, is used) exclusively for the purposes of religious worship or the advancement of religion; and (ii) is intended to be open (and, when constructed, is open) to any member of the public for those purposes; (d) an organization which maintains or assists in maintaining a zoo, museum, art gallery or similar undertaking or is engaged in or in connection with the promotion of culture or the arts; (e) an organization engaged in or in connection with the conservation or protection of animals; (f) a Government-assisted organization engaged solely in addressing problems relating to industrial and commercial development and promoting and enhancing the relationship between the public sector and the private sector; (g) a Government-assisted organization established and maintained exclusively to administer and augment a fund established or held solely for promoting national unity; (h) an organization established exclusively for the conservation or protection of the environment; (i) an international organization as defined under the International Organization (Privileges and Immunities) Act 1992 [Act 485] carrying out such charitable activities as determined by the Minister; (j) an organization established and maintained exclusively to administer or augment a fund established or held for the purpose of carrying out projects towards the acculturation of the community in information and communication technology, approved by the Minister; or (k) a benevolent fund or trust account established or held for the sole purpose of providing relief or aid to an individual who has no, or insufficient means, or in the case of a dependent individual whose parents or guardian has no, or insufficient means, to pay for the cost of the medical treatment required by such individual to treat a serious disease as defined in subsection 46(2). (7A ) An institution or organization referred to in subsection (7)— (a) may apply not more than twenty-five per cent of its accumulated funds as at the beginning of the basis period for the year of assessment for the carrying on of, or participation in, a business: Provided that the profits or income derived therefrom shall be used solely for charitable purposes or for the primary purpose for which the institution or organization was established; or (b) may carry out charitable activities outside Malaysia with the prior consent of the Minister. (7 B ) The reference to the carrying on of, or participation in, a business in paragraph (7 A )(a) shall not include the carrying on of a business by an institution or organization where— (a) the business is carried on in the course of the actual carrying out of the primary purpose of the institution or organization; or (b) the work in connection with the business is mainly carried on by persons for whose benefit the institution or organization was established. (8) Subject to subsection (12), there shall be deducted pursuant to this subsection from the aggregate income of a person to whom paragraph 34(6)(g) does not apply, for the relevant year reduced by any deduction for that year in accordance with subsection (1) an amount equal to any gift of money made by him in the basis year for that year, for the provision of library facilities which are accessible to the public, to public libraries and libraries of schools and institutions of higher education, not exceeding twenty thousand ringgit. (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 the provision of facilities in public places for the benefit of disabled persons. (10) 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 the cost or value (as certified by the Ministry of Health) of any gift of medical equipment made by him in the basis year for that year to any healthcare facility approved by that Ministry, and that amount shall not exceed twenty thousand ringgit. (11) Subject to subsection (12), there shall be deducted pursuant to this subsection from the aggregate income of a relevant person for the relevant year reduced by any deduction for that year in accordance with subsection (1) an amount equal to the value of any gift of painting (to be determined by the National Art Gallery or any state art gallery) made by him in the basis year for that year to the National Art Gallery or any state art gallery. (11 A) There shall be deducted pursuant to this subsection from the aggregate income of a company for the relevant year reduced by any deduction for that year in accordance with subsection (1) an amount equal to the payment of zakat perniagaan which is paid in the basis period for that relevant year to an appropriate religious authority established under any written law or any person authorized by such religious authority: Provided that— (a) the amount to be deducted pursuant to this subsection shall not exceed one-fortieth of the aggregate income of the company in the relevant year; and (b) the company is not an offshore company. (12) In subsections (6), (6A ), (8) and (11), references to basis year in relation to a company, trust body or co-operative society shall be construed as references to the basis period for the year of assessment of that company, trust body or co-operative society. *NOTE—See section 10 of Act 644 for explanation.