Donate your money for the poor people and enjoy the tax deductions

Have you ever donated money for any social cause or as a charity or for any philanthropic purposes? If yes, you have not only helped in the betterment of the society but have also saved you from the burden of the excess tax. The Section 80G of the Income tax department encourages performing charitable deeds to provide benefits to the needy and poor people and on the other hand you will be given donation tax exemption for this donation. You will be charged less income tax than you must have been charged if you didn’t have donated the money to the needy and poor people of the society.

There are thousands of people in India who are in need of money, they don’t have a proper house to live, nothing to eat, nothing proper to wear. Donation tax benefit India is a step taken by the Government to encourage the people who are capable of helping others with their money. The Section 80G offers deduction on tax for donations to certain charitable institutions and prescribed funds which aims to help the poor and needy people. This benefit can be utilized by all who are capable of donating money no matter whether you are a company, individual, NRI or HUF.

Criteria for the tax deductions

The extent of a tax deduction can be 100 % or 50 % of the donation depending upon the institution to which the amount is donated to. Remember, you are not exempted from the taxes by donating money to the political parties in any form. All types of donations are not eligible for tax benefits, only those donations that are given to any prescribed funds or any renowned charitable trust are eligible for the tax exemptions. Some of the major criteria for the tax deductions on the donations are:

·         The donations can be paid either out of exempted income or out of taxable income.

·         The donations that are made in cash or cheque are only eligible for tax benefits. Donations made in kind in the form of food, clothes and medicines etc. does not count.

·         Donations to any foreign charitable trust don’t come under the tax exemption category.

·         Donations given by political parties are eligible for a 100 % deduction.

·         Donations given to any association that works for the development of the sports or games in the India are eligible for deductions.

·         All donations given to the charitable trust are not applicable for deductions.

Choose the prescribed funds for maximum benefits

You can also avail the benefits offered by the tax exemptions for donations. There are many relief funds such as the National Defence Fund, Prime Minister’s National Relief Fund, Prime Minister, Armenia Earthquake Relief Fund and many more prescribed funds that can offer you a 100 % tax deduction. On the other hands donations to Jawaharlal Nehru Memorial Fund, National Children’s Fund, Indira Gandhi Memorial Trust and many more offers you 50 % tax deduction. Thus, lend your hand for the betterment of the society and also reap the benefits of tax exemptions.