Section 80G of the Income Tax Act allows you to claim tax deductions on donations made to certain charitable funds and relief funds. It encourages philanthropy while providing tax relief.
How Much Can You Claim?
The deduction limit depends on the recipient organization. It can be categorized into:
- 100% Deduction without limit: Prime Minister's National Relief Fund, National Defence Fund, etc.
- 50% Deduction without limit: Prime Minister's Draught Relief Fund, etc.
- 100% Deduction subject to 10% of Adjusted Gross Total Income: Donations to Government or approved local authority for promoting family planning.
- 50% Deduction subject to 10% of Adjusted Gross Total Income: Donations to any other approved charitable trust or institution.
Proof of Donation
To claim the deduction, you must have the stamped receipt from the charitable trust. The receipt must mention the Name, Address, PAN of the trust, and the amount donated.
Mode of Payment
Donations made in cash exceeding ₹2,000 are NOT eligible for deduction. You should donate via Cheque, Draft, or Digital Payment modes to claim the benefit.
Who Can Claim?
Any taxpayer—Individual, Company, Firm, HUF, etc.—can claim deduction under Section 80G, irrespective of whether their income is from business or salary.
Conclusion
Donating to charity brings joy, and with Section 80G, it also brings tax savings. Ensure the entity you are donating to has a valid 80G registration certificate.