According to the Income Tax Act, 1961, section 80G offers a tax deduction for donations to certain prescribed funds and charitable institutions.
Eligibility
The section 80G is applicable to all the person or assessee who makes an eligible donation whether an individual, HUF, NRI or a company.
Exemption Limit
The extent of deduction is either 50% or 100% of the contribution depending on the charitable institution it is donated.
For some type of funds, the deduction is limited to 10% of the Adjusted Gross Total Income. In this case even we do make a donation larger than 10% of our Adjusted Gross Total Income, the donation amount eligible for claiming a deduction would be maximum of 10% of the Adjusted Gross Total Income.
For example if the gross salary is 6 lac and investment under 80C is 1 lac so our Adjusted Gross Salary = 5 lac, so we can get exemption on donation upto 10% of 5 lac i.e.- 50k.
Scope of Exemption
Only donations made in cash or cheque are eligible for Tax Rebate. Donations made in kind, in the form of food, clothing, medicines etc are not eligible.
Donations made to foreign trusts do not qualify for deduction under the section 80G.Also we cannot claim deduction for donations made to political parties for any reason including paying for brochures or pamphlets etc brought out by such parties.
For 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 to all charitable institutions is not qualify for the deduction.
Donations qualifying for 100% exemption without any limit
Prime Minister’s National Relief Fund
National Defence Fund
Prime Minister’s Armenia Earthquake Relief Fund
The Africa (Public Contribution - India) Fund
The National Foundation for Communal Harmony
Approved university or educational institution of national eminence
The Chief Minister’s Earthquake Relief Fund, Maharashtra
Donations made to Zila Saksharta Samitis.
The National Blood Transfusion Council or a State Blood Transfusion Council.
The Army Central Welfare Fund or the Indian Naval Benevolent Fund or The Air Force Central Welfare Fund.
Donations qualify for 50% exemption without any limit
Jawaharlal Nehru Memorial Fund
Prime Minister’s Drought Relief Fund
National Children’s Fund
Indira Gandhi Memorial Trust
The Rajiv Gandhi Foundation
Donations eligible for 100% deduction subject to 10% of adjusted gross total income
Donations to the Government or a local authority for the purpose of promoting family planning.
Sums paid by a company to Indian Olympic Association
Donations eligible for 50% deduction subject to 10% of adjusted gross total income
Donation to the Government or any local authority to be utilized by them for any charitable purposes other than the purpose of promoting family planning.
Income Tax deduction under 80C
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