At some point in our lives, we donate for a lead to or provide economic help towards a charitable service. For these contributions, the government offers specific tax positive aspects beneath Section 80G of the Income Tax Act.
Both person and non-person taxpayers, who make an eligible donation, can avail of tax positive aspects, based on the limits and situations of the Income Tax Act. However, note that this can be availed by them opting for the old tax regime.
Even even though charitable donations get tax positive aspects, there are terms and situations attached to them. For instance, the mode of donation should be in monetary terms. Further, donations up to Rs 2,000 can be made in money – any quantity above that wants to be made by way of bank transfer, cheque, draft, and so on. From FY 2017-18 onwards, donations made in money exceeding Rs 2,000 had been not permitted as a deduction. Contributions made in sort such as meals, clothing, medicines, and so on. do not qualify for deduction U/S 80G.
Amount of donation
Under Section 80G, a deduction of 50 per cent or one hundred per cent of the quantity contributed can be availed as a deduction. Note that, based on the gross total revenue of a taxpayer, donations made to specific organisations could also be restricted to an upper threshold for claiming tax deductions. For instance, when donation for repairs or renovation to any notified temple or mosque or gurudwara or church or a religious spot is eligible for 50 per cent deduction topic to 10 per cent of the gross total revenue of the taxpayer, a donation to funds such as National Sports Fund, National Cultural Fund, Fund for Technology Development and Application, National Children’s Fund, National Defence Fund set up by the Central Government, Prime Minister’s National Relief Fund (PMNRF) and so on. is eligible for one hundred per cent deduction with out any limit.
However, donations made to a foreign trust or any political party do not qualify for this deduction. Additionally, contributions towards the PM CARES Fund are one hundred per cent exempt beneath Section 80(G).
Experts say taxpayers really should often retain a receipt of their donations. For instance, the institution exactly where the donation is becoming made really should challenge a receipt to the donor which will act as a documentary proof for claiming the deduction. The receipt issued really should be right and have particulars like the name, address and PAN of the doner, along with the donation quantity.