What are income tax benefits available on donations made? – The Economic Times

Clipped from: https://economictimes.indiatimes.com/wealth/tax/what-are-income-tax-benefits-available-on-donations-made/articleshow/84087217.cmsSynopsis

Donations made to help people tide over the covid-19 pandemic can help you save income tax as well. Here is a look at how Section 80G of the Income-tax Act can help you.

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Many people have lost their livelihoods during this pandemic and it is our moral responsibility to contribute to those in need. Under Section 80G of the Income Tax Act, the government also gives some tax benefits on the donations given. This can be availed by those availing the old tax regime.

Who can get the benefit?
Any taxpayer, individual or non-individual, who makes an eligible donation can avail the tax benefits subject to the limits and conditions of the Income Tax Act.

Mode of donation
The donation must be made in monetary terms. Donation up to Rs 2,000 can be made in cash, but any amount above that must be made through cheque, bank transfer, etc.

Limits
A deduction of 50% or 100% of the amount contributed can be availed as a deduction. Donations to certain organisations may also be restricted to an upper threshold for claiming tax deductions, depending upon the gross total income of the taxpayer. For example, a donation to PMNRF is eligible for 100% deduction without any limit. However, donation to a notified temple/mosque/gurudwara/church or such place for repairs or renovation is eligible for 50% deduction subject to 10% of the gross total income of the taxpayer.

Documents
The institution to whom the donation is being made must issue a receipt to the donor which acts as documentary proof for claiming the deduction. The receipt issued should have the details like name, address and PAN of the doner, besides the donation amount.

Points to note

  • Donations made to any political party or a foreign trust does not qualify for this deduction.
  • Contributions towards the PM CARES Fund are 100% exempt under Section 80(G).

(Content on this page is courtesy Centre for Investment Education and Learning (CIEL). Contributions by Girija Gadre, Arti Bhargava and Labdhi Mehta.)
(Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of www.economictimes.com.)(Your legal guide on estate planning, inheritance, will and more.

All you need to know about ITR filing for FY 2020-21.)

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