How Americans Can Make Donations to Indian Charity Causes Tax Effective

There are around 30 lakh NGOs / nonprofits in India. They are working for various causes in the community, mainly poverty alleviation, education, child rights, women empowerment, street children and orphans, elderly and more. They have an active online presence to raise funds.

On the other hand, there are many philanthropy minded Americans, including those of Indian origin, who wish to contribute to charity causes in India.

American donors can directly donate to nonprofits registered in India, but these donations are not tax deductible in US.

Donors in US who wish to make a tax deductible donation for India have three channels :

1. Donate to a US-based nonprofit which has charity projects in India. Some of these are these charities include India Development and Relief Fund (idrf.org), Pratham USA (prathamusa.org), Asha for Education (ashanet.org), Seva Foundation (seva.org), Sankara Eye Foundation USA (giftofvision.org), Association for India’s development (aidindia.org), American India Foundation (aif.org).

2. A grant making organization in US, such as CAF America, which give grants to Indian nonprofits

3. An Organization in US which supports an Indian charitable NGO. SERUDS INC is a 501(c)3 charity located in 5126 Ballantrae Blvd., Land O Lakes, FL 3438-3065, which sends funds to SERUDS India for charity programs in India. SERUDS India has a valid FCRA Registration, and can legally receive charitable funds from SERUDS INC.

Before making a contribution, donors need to check that the US entity is a 501(c)(3) public charity. Further, Indian nonprofits must have a valid Foreign Contribution Regulation Act (FCRA) Registration to be able to legally receive charitable funds from donors outside of India.

A charity must be registered with the Internal Revenue Service (IRS) as a 501(c)(3) public charity to be eligible for deductions on contributions.
Taxpayers who wish to donate to a specific charity can make sure that it is an eligible charity by doing a search  on IRS.gov.

While claiming deduction on donations, taxpayer must file a Schedule A with her tax form. With proper documentation, donor can claim vehicle or cash donations. To deduct a non-cash donation, donor will also have to fill out Form 8283.