TAX BENEFITS TO THE DONOR
A donor, who is a resident of India and a non resident Indian holding an Indian Passport and also having taxable income in India, can claim income tax benefit from the donation made to an NGO with exemption status under section 80G, 80GGA, 35AC, 35AC (! &2), (! &3) of the Income Tax Act of 1961.
Who qualifies for the Tax Benefits?
Resident Indian:
i. having taxable income in India and
ii. Donating to an NGO that is having valid tax exemption certificate under section 80G, 80GGA or 35AC of the Income tax Act of 1961 of India. (The exemption certificate granted to the NGO by the Commissioner states the approval number and the period of approval under the said Sections.)
Non Resident Indian
iii. Holding Indian Passport,
iv. Donating to an NGO that is having valid tax exemption certificate under section 80G, 80GGA or 35 AC of the Income tax Act of 1961 of India. (The exemption certificate granted to the NGO by the Commissioner states the approval number and the period of approval under the said Sections.)
Deductions from total income with respect to donations made (Sec.80G).
Deduction under Section 80G is available to any tax payer (may be individual, company, firm or any other person)
Monetary Limits with respect to Donations made
There are few restrictions on the amount of donation that qualifies for deduction under sec 80G.
Some donations qualify only up to the limit of 10% of the Gross Total Income - GTI. If the amount of donation made exceeds 10% of the GTI the excess has to be ignored for deduction. Again within the overall limits of 10% of GTI some donations qualify for deduction at the rate of 100% and some qualify at the rate of 50%.
A. Donations to the following for which 10% ceiling of the Gross Total Income applies and for which the donor is entitled 50 % deduction of the sum donated.
Any NGO, fund or institution established in India for a charitable purpose, which satisfies conditions mentioned in Section 80G(5)
B. Donations to the following for which 10% ceiling of the Gross Total Income does not apply and for which the donor is entitled 100 % deduction of the sum donated.
Govt. or any approved NGO local authority, institution or association to be utilised for the purpose of promoting family planning.
The taxable income referred to, is the Adjusted Gross Total Income. Adjusted Gross Total Income for this purpose is the gross total income as reduced by the following:
A. Amount deductible u/s 80CCC to 80U (but not 80G)
B. Such sums on which income tax is not payable.
C. Long term capital gains.
D. Incomes referred to in sections 115A, 115AB, 115AC, 115AD, and 115D.
Note: Proof of payment
1. Proof of payment must be submitted to claim the deduction. However simply because the receipt which is produced before the Assessing Officer is defective (not affixed with revenue stamps) it does not automatically invalidate the donation itself.
2. It is always advisable to make donation by cheque, pay order or demand draft rather than by cash. Donation in kind does not entitle any tax benefit.
A donor, who is a resident of India and a non resident Indian holding an Indian Passport and also having taxable income in India, can claim income tax benefit from the donation made to an NGO with exemption status under section 80G, 80GGA, 35AC, 35AC (! &2), (! &3) of the Income Tax Act of 1961.
Who qualifies for the Tax Benefits?
Resident Indian:
i. having taxable income in India and
ii. Donating to an NGO that is having valid tax exemption certificate under section 80G, 80GGA or 35AC of the Income tax Act of 1961 of India. (The exemption certificate granted to the NGO by the Commissioner states the approval number and the period of approval under the said Sections.)
Non Resident Indian
iii. Holding Indian Passport,
iv. Donating to an NGO that is having valid tax exemption certificate under section 80G, 80GGA or 35 AC of the Income tax Act of 1961 of India. (The exemption certificate granted to the NGO by the Commissioner states the approval number and the period of approval under the said Sections.)
Deductions from total income with respect to donations made (Sec.80G).
Deduction under Section 80G is available to any tax payer (may be individual, company, firm or any other person)
Monetary Limits with respect to Donations made
There are few restrictions on the amount of donation that qualifies for deduction under sec 80G.
Some donations qualify only up to the limit of 10% of the Gross Total Income - GTI. If the amount of donation made exceeds 10% of the GTI the excess has to be ignored for deduction. Again within the overall limits of 10% of GTI some donations qualify for deduction at the rate of 100% and some qualify at the rate of 50%.
A. Donations to the following for which 10% ceiling of the Gross Total Income applies and for which the donor is entitled 50 % deduction of the sum donated.
Any NGO, fund or institution established in India for a charitable purpose, which satisfies conditions mentioned in Section 80G(5)
B. Donations to the following for which 10% ceiling of the Gross Total Income does not apply and for which the donor is entitled 100 % deduction of the sum donated.
Govt. or any approved NGO local authority, institution or association to be utilised for the purpose of promoting family planning.
The taxable income referred to, is the Adjusted Gross Total Income. Adjusted Gross Total Income for this purpose is the gross total income as reduced by the following:
A. Amount deductible u/s 80CCC to 80U (but not 80G)
B. Such sums on which income tax is not payable.
C. Long term capital gains.
D. Incomes referred to in sections 115A, 115AB, 115AC, 115AD, and 115D.
Note: Proof of payment
1. Proof of payment must be submitted to claim the deduction. However simply because the receipt which is produced before the Assessing Officer is defective (not affixed with revenue stamps) it does not automatically invalidate the donation itself.
2. It is always advisable to make donation by cheque, pay order or demand draft rather than by cash. Donation in kind does not entitle any tax benefit.
Tax benefits, Tax exemption, Tax deduction, Donors, donations, NGO.
| AccountAid.net TM A best place for all NGOs like charitable trust, society, You can also download all type of income tax forms, FCRA forms, 12A, 80G, 35AC related forms. This is a knowledge base. Ngo shall use this. Click here to access this site. But you should be very sensitive in using each and every links of this site which have best informations. |
Click here
for all useful forms for charitable Trust, Society & know 12A, 80G, 35AC, FCRA.