ZAKAT AS AN INCOME EXPENSE
According to the Inland Revenue Authority of Singapore (IRAS), Zakat is treated as an expense under Section 14 of the Income Tax Act and this is set off against the employment income of that individual. Zakat contributions are NOT eligible for 2.5 times tax-deduction. for the applicable period.
For example if an individual pays $200 in Zakat, he or she is only entitled to claim $200 as an expense against his/her employment income.
If you did not opt-in for auto-inclusion when you make your Zakat payment (via any platform), you have to declare Zakat as an expense under employment income as it is not auto-included.
Under the Notice of Assessment (NOA), Zakat expenses/contributions are reflected as part of Employment/Total Income.
Thus, it will NOT be shown as a separate line item in the NOA. Approved donations refer to cash donations made to any approved Institution of a Public Charter (IPC) or the Singapore Government that benefit the community.
If you opted in for auto-inclusion when you made payment for your Zakat, your Zakat contribution(s) has/have been deducted from your Employment/Total Income in your NOA.