Tax Savings: You can also save on taxes by donating and charities

Income Tax Saving: Tax selling time is underway. For this, exemptions and tax deductions provided by the Income Tax (Income Tax Act) can be availed. These include charities and donations. 

Sections 80G, 80GGA, and 80GGC of the Income Tax Act provide for tax benefits on charities and donations. 

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SECTION 80G

Section 80G of the Income Tax Act provides certain relief funds and charitable institutions with the option of availing the benefits of tax deduction by donating or donating. 

It can also be availed by individual income taxpayers, companies, HUFs, and NRIs. Donations or charity to foreign institutions and political parties do not come under its purview. 

The claim for deduction may be up to 100 percent in some cases, up to 50 percent in some, or unlimited in some. Donations can be made in cheques/drafts or cash. But cash will not benefit from a tax deduction on donations of more than Rs 2000.

UNDER SECTION 80G, ONLY TAXABLE OR EXEMPT INCOME (SUCH AS INCOME FROM TAX-FREE BONDS) CAN BE USED FOR DONATIONS TO GET TAX DEDUCTIONS. THE TRUSTOR INSTITUTION IS REQUIRED TO REGISTER UNDER SECTION 12A OF THE INCOME TAX ACT, 1961. SOME OF THE EXAMPLES OF INSTITUTIONS/ENTITIES WHOSE LIST HAS BEEN NOTIFIED BY THE INCOME TAX DEPARTMENT ARE THE PRIME MINISTER'S NATIONAL RELIEF FUND, THE CENTRAL GOVERNMENT'S NATIONAL DEFENCE FUND SETUP, THE DISTRICT LITERACY COMMITTEE, THE NATIONAL CULTURAL FUND, THE NATIONAL CHILDREN'S FUND, THE JAWAHARLAL NEHRU MEMORIAL FUND, THE PRIME MINISTER'S DROUGHT RELIEF FUND, ETC.

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Required documents

• STAMPD RECEIPT OF DONATION RECEIPT OF TRUST OR CHARITY. IT SHOULD MENTION THE NAME OF THE DONOR, HIS PAN, HIS ADDRESS, AND THE AMOUNT DONATED.
• form 58: to get a 100% claim on donation, form 58 has to be filled in and submitted.
• registration number of trust

SECTION 80GGA

If the individual taxpayer donates to a scientific research institution, an institution working for rural development, university or college, public sector company under 35AC, local authority or association/institution, etc.) sanctioned by the government (35(1)(ii), 35(1)(iii), 35CCA, 35CCB), he can avail tax deduction under Section 80GA. 

The donation may be made in cash/cheque/draft, although the benefit will not be available on donations above Rs. 10,000 in cash. Such donations from business or professional income do not come under the purview of exemption. 100 percent tax deduction can be found on donations.

SECTION 80GGC

IF A SALARIED EMPLOYEE DONATES TO A POLITICAL PARTY OR ELECTORAL TRUST, HE CAN AVAIL OF A TAX DEDUCTION UNDER SECTION 80GGC. BUT THE CONDITION FOR IT IS THAT IT SHOULD NOT BE IN THE DONATION CASH. THE BENEFIT OF TAX DEDUCTION CAN BE FOUND IN THE ENTIRE AMOUNT OF DONATION. BUT DEDUCTION AMOUNT SHOULD NOT EXCEED THE TOTAL TAXABLE INCOME OF THE PERSON.

According to the Income Tax Department, the meaning of a political party is a political party registered under Section 29A of the Representation of the People Act, 1951 (43 of 1951). The meaning of electoral trusts is from a non-profit company created under Section 8 of the Companies Act, 2013.

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