We need a generous donation from the well-wishers for
- Clothes & Blankets
- Medicare Equipments
- Distribution of Aids & Assistive Devices to specially-abled
- Care of the Elderly
All donations are exempted under 80G of IT Act.
|Mode of donation||Details|
|Cheque||Kindly draw your cheque in favour of “Social Impact Development Foundation”|
OR express your intention to ID: email@example.com
Deduction U/s. 80G of Income Tax Act, 1961 for donation –
INSPITE of all the contributions made to social causes, there is a huge gap between the demand for money from the needy and the amount donated by philanthropists. This probably is the reason why the Government has given tax benefits on donations. The amount donated towards charity attracts deduction under section 80G of the Income Tax Act, 1961. Section 80G has been in the law book since the financial year 1967-68 and it seems it’s here to stay. Several deductions have been swept away but the tax sop for donations appears to have survived the axe. The main features of tax benefit with respect to charity are as follows:
Allowable to all kind of Assessee:- Any person or ‘assessee’ who makes an eligible donation is entitled to get tax deductions subject to conditions. This section does not restrict the deduction to individuals, companies or any specific category of taxpayer.
Donation to Foreign Trust:- Donations made to foreign trusts do not qualify for deduction under this section.
Donation to Political Parties:- You cannot claim a deduction for donations made to political parties for any reason, including paying for brochures, souvenirs or pamphlets brought out by such parties.
The only donation made to prescribed funds and institutions qualify for the deduction: – All donations are not eligible for tax benefits. Tax benefits can be claimed only on specific donations i.e. those made to prescribed funds and institutions.
Maximum allowable deduction:- If the aggregate of the sums donated exceeds 10% of the adjusted gross total income, the amount in excess of 10% ceases to be entitled to tax benefit.
Documentation Required for Claiming deduction U/s. 80G
- Stamped receipt: For claiming deduction under Section 80G, a receipt issued by the recipient trust is a must. The receipt must contain the name, address & PAN of the Trust, the name of the donor, the amount donated (please ensure that the amount is written in words and figures tally).
- Mention of Registration No. of the Trust Under 80G on the receipt:- The most important requirement is the Registration number issued by the Income Tax Department under Section 80G. This number must be printed on the receipt. Generally, the Income Tax Department issues the registration for a limited period (of 2 years) only. Thereafter, the registration has to be renewed. The receipt must not only mention the Registration number but also the validity period of the registration.
- The validity of Registration U/s. 80G on the date of Donation:- The donor must ensure that the registration is valid on the date on which the donation is given. For example, the registration of a trust may be valid from April 1, 2007, to March 31, 2009. Now, if the trust does not get its registration renewed on or after April 1, 2009, then even if donation receipt is issued by the trust to the donor for donations received on or after April 1, 2009, the donor would not get any tax benefit.
With Effect from 1st October 2009, it is not required for a trust to apply for renewal of 80G certificate, if the same is valid on 01.10.2009 or valid up to date thereafter unless department specifically asks Trust to apply for renewal. So Old 80G certificate will remain valid if the same is valid on 01.10.2009.
- Photocopy of the 80G certificate:- Check the validity period of the 80G certificate.
Always insist on a photocopy of the 80G certificate in addition to the receipt.
Only donations in cheque & NEFT / RTGS / IMPS are eligible for the tax deduction:-Donations in kind do not entitle for any tax benefits. For example, during natural disasters such as floods, earthquake, and many organisations start campaigns for collecting clothes, blankets, food etc. Such donations will not fetch you any tax benefits.
Donation made by NRI: – NRIs are also entitled to claim tax benefits against donations, subject to the donations being made to eligible institutions and funds.
Deduction if donation deducted from Salary and donation receipt certificate is on the name of employer:- Employees can claim deduction u/s 80G provided a certificate from the Employer is received in which employer states the fact that The Contribution was made out from employee’s salary account.
Limit on donation amount: -There is no upper limit on the amount of donation. However, in some cases, there is a cap on the eligible amount i.e. a maximum of 10% of the gross total income.
Helping Hands are Better than Praying Lips TM