1 - Rebate or income tax

Zakat payments (including zakat qadha) could be deducted from the individual income tax as stated in Income tax act 1967 section 6A (3) in the current year.

Calculation simulation:
Tax payable : RM 1,000
Zakat on Income : RM 500
Zakat on savings : RM 200

Calculation:
Tax payable – zakat on income + zakat on savings = balance of tax payable
(RM 1,000) – (RM 500) + (RM 200) = RM 300
Tax rebate = RM700
 

2 - Connection between 'Potongan Cukai Berjadual' ( PCB ) and
     'Potongan Zakat Bulanan' ( Skim Berkat )

According to the government’s warta dated 1 January 2001 under the title of Modes in Income tax (deductions from income) (amendments 2000) effective January 2001:

Where an employee has paid zakat to the relevant zakat authority, the employer could make necessary changes to the PAY or PCB that is to be deducted having proved the zakat payment.

Example 1 : PCB for January 2005
Zakat paid : RM 55 Zakat paid
PCB scheduled to be deducted : RM 95
New PCB to be deducted : RM 40 ( RM95 – RM 55 )

Example 2 : PCB for May 2005
Zakat paid : RM 85
PCB scheduled to be deducted : RM 50
New PCB to be deducted : None

The surplus zakat amounting to RM35 as in example 2 above could be brought forward to be deducted from the PCB for the preceding month. However, any recalculation can only be done for the same year.

Excerpt from the Monthly Deduction Tax Schedule

With this amendment, you can apply immediately to your employer to have your PCB and zakat deductions to be recalculated (at any time as provided by the employer)

You may not wait until next year to have your amendments made by IRB