The answer to the question can be YES & NO.
Income Tax Act states that with effect from the year of assessment 2004, income derived from outside Malaysia and received in Malaysia by a resident individual is exempted from tax.
The key point here is that, the income must be derived from outside Malaysia meaning the money remitted from outside Malaysia & the money is not generated in Malaysia meaning the server that host the website must be outside Malaysia.
This was based on my communication with IRB Contact Center. Below is my question & answer by them.
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