Make A Donation -- Get Income Tax Relief Under 80G

Today there are several well-known secular, non-government organisations in India which are non-profitable and raise money for the philanthropic activities they carry out. There are events that they organise the proceeds of which are given for a good cause or corporate funding that they are able to get etc. Yet one of the most lucrative avenues is generally left untapped because of lack of awareness on the part of the common man.

It is only now that even these non-profit non-government organisations have started to realize that the general public is not apathetic towards their cause when they say no to make a donation. It is because they have no idea of:

A. How to go about it and which cause to support and

B. The benefits that they too can reap by helping these philanthropic organisations.

Hence today it has become very important for these NGOs to first educate people about the benefits that they incur when they make a donation. These benefits can be classified into:

A. Emotional wherein there is a feel good factor involved and

B. Financial wherein huge tax deductions can be availed off.

All monetary contributions made to NGOs and other non-profit social service organisations are covered under a special section known as the 80G of the Income Tax act. In fact donations under 80g are subject to both 50% and 100% tax exemption depending on the category it is made in. There are, however, certain facts that one needs to know when making monetary contributions under this section of the IT Act like:

A. Monetary contributions have to be made only to non profit social service organisations for availing this benefit. Foreign trusts or even political parties are not included in this section.

B. While payments made by both cash and cheque qualify for this exemption, the upper limit for gifting cash is INR10, 000. For cheques or digital payment modes, there is no upper limit. While the Union Budget presented in 2017 has asked for INR2000 as the maximum limit for claiming a deduction under 80g, it has yet to be implemented.

C. For monetary contributions made to some causes and NGOs, tax deduction can be claimed for 100% of the amount donated while for others it is 50%. Hence before making any contribution, this point needs to be checked.

D. In order to avail of this deduction under 80g of the IT Act for funds contributed to the cause of ngo India, the standard receipt which has been issued by the accepting organisation needs to be submitted as proof of having actually made the same. This receipt should mandatorily contain the following details about the NGO, trust or social service organisation accepting the same:-

a) Its name and address,

b) Its PAN number, 

c) Its registration number,

d) The name of the donor and

e) The amount which has been donated needs to be mentioned both in words and in figures.

Making a donation is indeed a noble a cause and gives a lot of mental peace and satisfaction. The fact that it can ever ensure financial gains for a person is something which people are only now becoming aware off.