When a person makes up his or her mind to donate to NGO, there is the list of tax benefits whenever a charity is made to a legal NGO.
Before we move straight to the tax benefits for both international and domestic donations made in India, let’s talk about the legal status of NGO and the sections that cover it.
At the domestic level, an NGO in India in order to provide all the tax benefits shall be:
- Shall be registered U/s.12AA of Income Tax Act, 1961
- Shall be registered U/s 80G(5)(vi) of the Income Tax Act 1961
- Shall have legal MOA and Board of Directors with valid ID Proof.
Related Link: Click to Read SERUDS Legal Status
For international Level, to provide tax benefits to international donors:
- Shall be registered under section 6(1) (a) of the Foreign Contribution (Regulation) Act, 1976 (FCRA). Know more about FCRA
These are all the legal parameters of knowing how good the charitable org is before you make a charity.
Donate to NGO and get following Tax Benefits:
(The below content is an archive of this previous blog, click to read)
US Tax Benefits under 501(c)(3)US tax benefits 503(C)(3)
Let’s understand the meaning of 501(c)(3) given on the official website 501c3.org as follows:
“Section 501(c)(3) is the portion of the US Internal Revenue Code that allows for federal tax exemption of nonprofit organizations, specifically those that are considered public charities, private foundations or private operating foundations. It is regulated and administered by the US Dept Treasury through the Internal Revenue Service”.
This tax benefit allows you to claim for the tax benefits for an individual is up to 1/3rd of the total income. The companies get tax benefits for all donations given to registered org, providing their claim does not exceed their total annual net income.
Tax Benefits under 80G India
All the donations are not eligible for tax benefits in India. Donations made to certain registered organizations and charitable relief funds are considered for tax benefits under 80G in India.
The website ‘Cleartax.in’ mentioned their article about 80G as
Only cash, cheque or DD should be the mode of payment and cash donations should not be exceeding 10,000 rs.
Donations made in the form of gifts, clothes, food items are not included for tax benefits.
The donor is eligible for 50% to 100% of tax deductions with additional clauses.
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