You look for several ways to save taxes when every year it is the time to file your income tax returns. In case you have taken all the basic tax-saving steps and are looking for more ways to do something good for society, consider making donations to charitable organizations like Akshaya Chaitanya. You can be sure that your donation to Akshaya Chaitanya will make a meaningful impact on the lives of underprivileged people. Our program ‘Paushtik Ahara’ is designed to provide nutritious meals to the children who receive education through a make-shift school called ‘School On Wheels’. We are making every effort to physically nourish the little ones to make them academically grow and reach great heights. We will explain all about the tax benefits under section 80G of the India Income Tax Act in this blog.
The tax benefits under section 80G allow you to reduce your taxable income and support the noble work of a charitable organisation. The many tax benefits under section 80G are designed to incentivize people towards doing more charity. You can choose your cause and look for an organisation working towards it. Before donating to avail the tax benefits under section 80G you can look up trusted charitable institutions and research their ongoing programs. The programs could be directed towards alleviating poverty and hunger, education, environment or any other social cause. The provisions under section 80G of the Indian Income Tax Act allow you to optimise your tax liabilities and help people in need. Any NGO in India struggling to function with limited resources can be helped if everyone donates under section 80G.
What is Section 80G?
Section 80G of the Income Tax Act, 1961 allows deduction in monetary donation of the taxpayer towards a charitable organisation. The act was implemented to provide tax benefits to donors by incentivising philanthropy. It is to be noted that the tax benefits under section 80G are not limited to individuals but corporates too can avail the benefits.
The tax benefits under section 80G provide the donor and benefactor with a win-win scenario. It helps to develop a culture of giving and empowers individuals and organizations to make a positive difference in society. This symbiotic exchange is a boon for everyone – individuals, corporations, NGOs, government, and the benefactors.
The tax benefits under section 80 G can be availed every year. Every donation will help create a more inclusive world while you unlock the tax benefits for yourself. Every NGO in India relies on such consistent support to function properly.
How to claim tax deduction on donations Under Section 80G?
Step 1:
Check for the list of eligible institutions and funds before donating. All donations do not qualify for deductions. Consider taking advice from a financial advisor to maximize the benefits of your donation.
Step 2:
Remember to obtain a receipt from the organisation after you donate. Particulars like name, address, amount of donation and the organisation’s registration number must be mentioned in the receipt.
Step 3:
Identify the deduction limit that varies by recipient type:
- 100% deduction for specified funds, charities and government schemes.
- 50 % deduction for specified institutions.
Step 4:
Calculate the donation amount after identifying the deduction category. The entire amount can be claimed if the donation falls under the 100% deduction category, if not then you can claim 50% of the amount donated.
Step 5:
Fill out your income tax return form according to the deduction category you identified in Step 3.
The Key modes through which donations under 80G can be made are:
- Cheques
- Demand Drafts
- Cash (for donations < Rs. 2,000).
Please note that in-kind donations and cash donations over Rs. 2,000 aren’t eligible.
Proofs required to claim a donation made under Section 80G of the Income Tax Act are:
- Donation receipt from the institution
- Form 10BE – this form is issued by the donee institution to the donor as a certificate of donation. Remember to verify that the donation amount matches the amount mentioned in the form.
- Download Form 10BE from the income tax portal. Check for the income tax department’s logo and watermark.
Corporate Social Responsibility (CSR):
Partnering with an NGO is a great way for corporations to channel their resources towards helping society. Corporates can direct their funds towards a cause their brand resonates with and simultaneously enjoy tax benefits under section 80G. Corporations not only get to customise their financial profile but also earn goodwill in the corporate world. The employees get a sense of fulfilment and feel connected through a greater cause.
Spreading the world of Charity
Individuals and Corporations can also show their support by spreading awareness. They can use their respective social media handles to write about the programs they funded and their impact on the lives of underprivileged people. The message can be amplified by leveraging their network and making a request to further spread the word. Every NGO in India can benefit from this kind of advocacy.
We tried to cover the main tax benefits under Section 80 G in this blog and we hope that you avail the tax benefits while making a meaningful impact on society. At Akshaya Chaitanya, we try our best to provide nutritious and healthy meals to the needy and your support can make a huge difference in the lives of these people.