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Donate and Save Tax under sec 80G of Income Tax

How to Calculate and Claim Deduction under 80G | Qualifying Limit of Donation

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Make Tax Deductible Donation under Section 80G

Donations to SERUDS Charity will be eligible for 50% tax exemption under Section 80G of Income Tax Act.

Indian Donors will get instant Tax Exemption Receipts their email address.

Tax Exemption for US Citizens

Donate to SERUDS Inc., USA, a 501(c)3 tax exempt organization.

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FAQ. Your Questions on Sec. 80G Answered.

Income tax department allows reducing of the taxable income of the taxpayer in case the taxpayer makes certain investments or eligible expenditures allowed under Chapter VI A.

Another way you can save tax while doing some good work is by using the deductions available under Section 80G of Income Tax Act. Section 80G of the I-T Act allows donations made to specified relief funds and charitable institutions as a deduction from gross total income before arriving at taxable income.

Any fund or institution which satisfies the conditions mentioned in Section 80G(5) is eligible to receive donations under section 80G.

You can easily check the registration of trust/ organization through the Income Tax Website. Simply visit www.incometaxindia.gov.in & check for the trust/organization.

All taxpayers (individuals/companies/Hindu Undivided Families) are eligible to make donations to charity under Section 80G

In case you wish to claim income tax deduction benefit in respect of the amount you have donated to eligible institutions you need to adhere to the following :

  1. No deduction or income tax benefit shall be given for donations made in kind such as donation of clothes, food etc.
  2. No tax benefit for cash donations exceeding Rs 2000 shall be allowed to the taxpayer.
  3. The payment for higher amount (exceeding Rs 2000) should be made through cheque, net banking, demand draft or other banking channels.

You can claim deduction on all types of income except those incomes which are taxable at special rates. For e.g. short term capital gains, long term capital gain etc.

For claiming deduction u/s 80G, you have to submit the following details in your Income Tax Return (ITR):

• Full Name of the Donee Institution
• Amount of contribution made in the corresponding financial year
• PAN Number of Donee
• Address of Donee

• Check the category in which the fund/charitable institution falls (100% or 50% deduction with or without maximum / qualifying limit).

• When the payment is made to first category then there is no need for further calculations, just claim 100% or 50% of the donation amount subject to taxable income.
• When payment is made to the second category you need to first find out the maximum/qualifying limit. The maximum / qualifying limit is 10% of the “adjusted gross total income”.

• Now use this formula to arrive at the amount of deduction =
a) Gross Qualifying limit = All donations made to category 2
b) Net Qualifying limit = This is 10% of the “adjusted gross total income”.
c) Amount Deductible = 100%/50% of the donation amount subject to qualifying limit.

The donations specified in Section 80G are eligible for a deduction of up to 100% or 50% of donation amount with or without qualifying limit, as provided in Section 80G.

 

The percentage of donation eligible for deduction and the donation limit depend on the fund or organization or trust to which donation is made :

  • Funds entitled for 100% deduction without qualifying limit
  • Funds entitled for 50% deduction without qualifying limit
  • Funds entitled for 100% deduction subject to qualifying limit
  • Funds entitled for 50% deduction subject to qualifying limit

 

For the last two funds from above list, deduction under Section 80G is limited to a maximum of 10% of the Gross Total Income