Donating to your preferred charity may save you income tax; here's how
Section 80G, 80GGA and 80GGC cover provisions which make your donations eligible for tax deductions.
Income tax rules in India allow taxpayers to seek deduction against money they donate to charities within the given financial year.
Section 80C of I-T Act which offers tax savings of up to Rs 1,50,000 in a year, lists down several tax saving investment plans. The most common ones are Equity Linked Savings Scheme, Sukanya Samriddhi Account, National Savings Certificate and deposits in PPF account.
Charity is one more option that can help you save tax. The donations you make are also an expense for you. Section 80G, 80GGA and 80GGC cover provisions which make your donations eligible for tax deductions.
Speaking with Zeebiz, Archit Gupta, Founder & CEO of ClearTax.com, explains how. He said, "Donating money to certain funds such as PM relief fund and some notified NGO can help you save tax."
However, not every charity gives you 100% tax saving. In some cases only 50% deduction is allowed of the amount donated. There is a specified list of funds eligible for donation u/s 80G is available. Donation can also be made to scientific institutions and religious body. But the donation should not be made in cash for amount above Rs 10,000, Gupta pointed out.
How can you claim the deduction?
As per ClearTax, there are four important details that you need to submit in your Income Tax Return:
- Name of the Donee
- PAN of the Donee
- Address of the Donee
- and the amount contributed
Morever, here's a list of funds and institutions under Section 80G where donations with 100% deduction without any qualifying limit:
- National Defence Fund set up by the Central Government
- Prime Minister's National Relief Fund
- National Foundation for Communal Harmony
- An approved university/educational institution of National eminence
- Zila Saksharta Samiti constituted in any district under the chairmanship of the Collector of that district
- Fund set up by a State Government for the medical relief to the poor
- National Illness Assistance Fund
- National Blood Transfusion Council or to any State Blood Transfusion Council
- National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities
- National Sports Fund
- National Cultural Fund
- Fund for Technology Development and Application
- National Children's Fund
- Chief Minister's Relief Fund or Lieutenant Governor's Relief Fund with respect to any State or Union Territory
- the Army Central Welfare Fund or the Indian Naval Benevolent Fund or the Air Force Central Welfare Fund, Andhra Pradesh Chief Minister's Cyclone Relief Fund, 1996
- The Maharashtra Chief Minister's Relief Fund during October 1, 1993 and October 6, 1993
- Chief Minister's Earthquake Relief Fund, Maharashtra
- Any fund set up by the State Government of Gujarat exclusively for providing relief to the victims of earthquake in Gujarat
- Any trust, institution or fund to which Section 80G(5C) applies for providing relief to the victims of earthquake in Gujarat (contribution made during January 26, 2001 and September 30, 2001) or
- Prime Minister's Armenia Earthquake Relief Fund
- Africa (Public Contributions - India) Fund
- Swachh Bharat Kosh (applicable from FY 2014-15)
- Clean Ganga Fund (applicable from FY 2014-15)
- National Fund for Control of Drug Abuse (applicable from FY 2015-16)
Donations with 50% deduction without any qualifying limit:
- Jawaharlal Nehru Memorial Fund
- Prime Minister's Drought Relief Fund
- Indira Gandhi Memorial Trust
- Rajiv Gandhi Foundation