In move to encourage donation from individuals and corporates, the government has exempted donation amounts that can be deducted from income to select charitable and government specified schemes/institutions.
Section 80G of income tax law provides tax benefits on amount donated to NGO's.
Any person or 'assessee' or HUF who makes an eligible donation is entitled to get tax deductions subject to conditions.
If the aggregate of the sum exceeds ten per cent of the gross total income then the amount in excess of ten per cent of the gross total income shall be ignored for the purpose of computing the aggregate of the sums in respect of which deduction is to be allowed.
Only registered institutions are eligible
Yes, not all charity and institutions qualify for deductions. Only, which are registered under 80G of Income Tax Act qualify.
If you are yet to make donation than you should consider these points while availing receipt.
The receipt should have the following information:
- The name and address of the trust / institution
- The name of the donor
- The amount donated
- The registration number issued to the trust / institution by the income tax department under section 80G
*Check the validity period of the 80G certificate. Always insist on a photocopy of the 80G certificate in addition to the receipt.
- Donation made in cash or cheque are qualified for the deduction anything in kind( food, medicine etc.) are not eligible.
- Donations made to foreign charitable trusts or to political parties are not eligible for any deduction.
- Donations made to Indian Olympic Association, any association notified u/s 10(23) for development of infrastructure for sports or games, or for sponsorship of sports or games, only a company is eligible for deduction.
- Donations made by NRI are also eligible only on eligible institutions and funds.
Donations with 100% deduction without any qualifying limit:
1. Prime Minister's National Relief Fund
2. National Defence Fund
3. Prime Minister's Armenia Earthquake Relief Fund
4. The Africa (Public Contribution - India) Fund
5. The National Foundation for Communal Harmony
6. Approved university or educational institution of national eminence
7. The Chief Minister's Earthquake Relief Fund, Maharashtra
8. Donations made to Zila Saksharta Samitis.
9. The National Blood Transfusion Council or a State Blood Transfusion Council.
10. The Army Central Welfare Fund or the Indian Naval Benevolent Fund or The Air Force Central Welfare Fund.
Donations with 50% deduction without any qualifying limit:
1. Jawaharlal Nehru Memorial Fund
2. Prime Minister's Drought Relief Fund
3. National Children's Fund
4. Indira Gandhi Memorial Trust
5. The Rajiv Gandhi Foundation.