Donation exemption under income tax

What is a Donation exemption under income tax?

Section 80G deduction of the Income Tax Act is allowed for the amount paid by the taxpayer as a donation to any fund or institution or charitable Trust. All donations are not treated equally under Income Tax Act. Donations to certain funds and institutions qualify for a 100% or 50% deduction without any qualifying limit.

What is the limit of 80G income tax exemption?

The maximum amount allowable under Section 80G shall be 50% of the lower amount donated or the qualifying limit for your donations under Section 80G, which is 10% of your adjusted gross total income.
Section 80G of the Income Tax Act, of 1961, allows taxpayers to save tax by donating money to eligible charitable institutions. By donating to eligible institutions and organizations, taxpayers can claim deductions ranging from 50% to 100% of the amount donated.

Eligibility to claim deduction under Section 80G:

Individuals

Companies

Firms

Hindu Undivided Firm (HUF)

Non-Resident Indian (NRI)

Any other person

Documents required to claim a tax deduction on donations:

The receipt must include information such as the donor’s name, address, PAN, trust registration number, and name, as well as the donation amount and method of payment. Form 58 is required if the donation qualifies for a 100% deduction.

What is the mode of payment under Section 80G?

Demand draft

Cash (for donations below Rs 2,000)

Cheque

Donations Eligible for 50% Deduction Without Qualifying Limit

The above details need to be mentioned in the respective tables given in the ITR.

Table A: For donations entitled to 100% deduction without qualifying limit

Table B: For donations entitled to 50% deduction without qualifying limit

Table C: For donations entitled to 100% deduction subject to qualifying limit

Table D: For donations entitled to a 50% deduction subject to the qualifying limit

How much donation is exempted from income tax?

Donations over Rs 2,000 must not be made in cash to qualify under Section 80G. The various donations specified in Section 80G are eligible for a deduction of up to 100% or 50% with or without restriction, as provided in Section 80G.

List of donations eligible for 100% deduction without qualifying limit:

• National Sports Fund
• National Cultural Fund
• 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
• Fund set up by a state government for medical relief to the poor
• Prime Minister’s Armenia Earthquake Relief Fund
• Africa (Public Contributions – India) Fund
• Swachh Bharat Kosh
• Clean Ganga Fund
• National Fund for Control of Drug Abuse
• Fund for Technology Development and Application
• National Children’s Fund
• Chief Minister’s Relief Fund or Lieutenant Governor’s
• 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
• 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 the earthquake in Gujarat
• Any trust, institution, or fund to which Section 80G(5C) applies for providing relief to the victims of the earthquake in Gujarat (contribution made between January 26, 2001, and September 30, 2001)
• National Illness Assistance Fund
• National Blood Transfusion Council or any State Blood Transfusion Council
• National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation, and Multiple

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