How To Get A Tax Deduction For Charitable Donations In India?

Charity is a noble cause and we as a human should do it if we are capable of doing that. Governments of all countries promote this noble cause that’s why they provide tax deduction for charitable donations. Most of us want to save our taxes and find ways to save them. Nothing seems the best option to save the taxes than doing charity. This noble act not only saves your taxes but also helps the marginalized section of our society. Let’s get to know in detail how to save the taxes and aid in uplifting and empowering the unprivileged section of our society.

How To Get A Tax Deduction For Charitable Donations In India

Note: Not all the charitable trusts and NGO in India come under the tax deduction category. Only the qualified and listed NGOs can save your taxes. So, it’s better to check out the organizations to do charity for which are approved by the commissioner of Income tax. This is where section 80G of the Income Tax Act comes into the picture.

Must Know About Section 80G of the Income Tax Act

Donating your hard-earned money to a good cause makes you feel content and happy. What if that comes with the exemption of your taxes? Yes, you heard it right. Under section 80G of the income tax, there are several ways to save the taxes and do good for society. Donating securities, land, and money to state or central governments, charitable trust in Noida and NGOs can save your taxes. Not only individuals but companies can also save their taxes by donating to the unprivileged section of society.

Companies or individuals can claim the tax deduction while filing the income tax return just by providing the receipt of their donation. Do you that all the certified NGOs send the list of people who donate to them to the income tax department? So, that those people can get the tax exemption!

Documents Required for Tax Exemption:

Many people don’t have an idea about the documents that are needed for a tax deduction for charitable donations while filing income tax returns. Have a look at the document list-

  • The very first thing that is needed for the tax deduction for the charitable donation in India to the income tax department is name as well as address of the charitable organization
  • Also, you have to mention your full name as per your document
  • Mention the amount in words and also in figures
  • In the end, you will need the registration number of the charitable trust and its validity

Along with these documents, taxpayers should also have a few more documents such as

  • Copy of 80G certificate
  • Receipt of donations
  • For 100% tax exemption, form 58 should also be submitted

Under Section 80G Maximum and Minimum limit of Tax Exemption

There are mainly 3 kinds of tax exemptions given by central and state governments i.e. 100%, 50%, and 10%.

  1. 100% exemptions or tax deductions for charitable donations
    In case of the funds donated to the originations such as National Defence Fund, State/National Blood Transfusion Council, PM’s National Relief Fun, and others. There will be a 100% exemption of the tax.
  2. 50% tax exemption of tax
    • Indira Gandhi Memorial fund
    • PM Drought Relief Fund
    • National Children Fund and others
    All these funds become eligible for the 50% tax exemption category under section 80G of the Income Tax Act.
  3. 10% tax exemption by the income tax department
    There are certain cases apart from the above-mentioned funds where only 10% of the adjusted gross income comes under tax deduction.

Apart from this, our GoodWorks Trust is also certified by the 10A and 12A of the Income Tax Act. As per section 12A of the Income Tax Act, charitable trusts, NGOs, and institutions related to religion and others are entitled to tax exemptions. And, under section 10A, newly established companies in special economic zones and free trade zones get some tax benefits on the profits. The profit earned by Assesse from the company which comes under this section do not included in his/her total income.

What is the Payment Mode for Donation?

Under section 80G of the Income Tax Act, only amounts up to Rupees 2000 can be donated in the form of a case. Amounts more than 2000 Rupees should be donated in the form of DD, cheque, and also digitally. Yes, the digital payment option is there.

Many people are not aware of the fact that people are running NGOs not to help the marginalized section of society but for their profit. They donate to the wrong people or organizations. To control such activities and not betray the faith of the donors, the government of India has come up with various strict laws. This is why it is very important to donate to an organization that is registered with the state or central government. The government gives registration numbers only to the right NGOs. That’s why it is important to ensure before donating your hard-earned money whether that organization is certified or not.

Contribute For A Better World

Goodworks is a renowned that works for women’s empowerment, human rights, and advocacy, free education for children, and food and health security of the unprivileged. It is the best NGO in Noida for you if you are interested to donate for the right cause. With more than 1000+ donors and volunteers and 5 community centers along with the enrolment with 300+ schools, this organization is working excellently. Please come forward and support us in our extraordinary work by contributing funds to this trust. Let’s come together and build a beautiful world and give our children a better world. Interested donors can visit our website and contact us. Hope you find this read informative and interesting.

Moreover, you can also read about Active NGOs & Transforming Lives in Noida and other related information on our website.