A. Allowable to all kind of Assessee
B. Donation to Foreign Trust: Donations made to foreign trusts do not qualify for deduction
C. Donation to Political Parties: We cannot claim deduction for donations made to political parties for any reason
D. Only donation made to made to prescribed funds and institutions qualify for deduction
E. Maximum allowable deduction: If aggregate of the sums donated exceed 10% of the adjusted gross total income, the amount in excess of 10% ceases to be entitled for tax benefit.
A. Stamped receipt: Receipt issued by the recipient trust is a must. The receipt must contain the name , address & PAN of the Trust, the name of the donor, the amount donated .
B. In case of donation which are eligible for 100% deduction recipient should also insist on form 58 from trust. Form 58 contains the details of project cost (for which the donation is received), amount authorised under this project and the actual amount collected. Without form 58, the claim for 100% deduction could be rejected even if the receipt mentions 100% deduction.
Only donations in cash/cheque are eligible for the tax deduction:
Donations in kind do not entitle for any tax benefits. For example, during natural disasters such as floods, earthquake, and many organisations start campaigns for collecting clothes, blankets, food etc. Such donations will not fetch you any tax benefits. No deduction under this section is allowable in case of amount of donation if exceeds Rs 10000/- unless the amount is paid by any mode other than cash.
Donation made by NRI:
NRIs are also entitled to claim tax benefits against donations, subject to the donations being made to eligible institutions and funds.
Deduction if donation deducted from Salary and donation receipt certificate is on the name of employer:
Employees can claim deduction u/s 80G provided a certificate from the Employer is received in which employer states the fact that The Contribution was made out from employee’s salary account.
Limit on donation amount:
There is no upper limit on the amount of donation. However in some cases there is a cap on the eligible amount i.e. a maximum of 10% of the gross total income.
Deduction amount U/s. 80G:
Donations paid to specified institutions qualify for tax deduction under section 80G but is subject to certain ceiling limits. Based on limits, we can broadly divide all eligible donations under section 80G into four categories:
a) 100% deduction without any qualifying limit (e.g., Prime Minister’s National Relief Fund).
b) 50% deduction without any qualifying limit (e.g., Indira Gandhi Memorial Trust).
c) 100% deduction subject to qualifying limit (e.g., an approved institution for promoting family planning).
d) 50% deduction subject to qualifying limit (e.g., an approved institution for charitable purpose other than promoting family planning).
Donations with 100% deduction without any qualifying limit:
· Prime Minister’s National Relief Fund
· National Defence Fund
· Prime Minister’s Armenia Earthquake Relief Fund
· The Africa (Public Contribution – India) Fund
· The National Foundation for Communal Harmony
· Approved university or educational institution of national eminence
· The Chief Minister’s Earthquake Relief Fund, Maharashtra
· Donations made to Zila Saksharta Samitis.
· The National Blood Transfusion Council or a State Blood Transfusion Council.
· The Army Central Welfare Fund or the Indian Naval Benevolent Fund or The Air Force Central Welfare Fund.
· Army Central Welfare Fund, Indian Naval Ben. Fund, Air Force Central Welfare Fund.
· National Illness Assistance Fund
· Chief Minister’s or Lt. Governor’s Relief Fund
· National Sports Fund
· National Cultural Fund
· Govt./ local authority/ institution/ association towards promoting family planning
· Central Govt.’s Fund for Technology Development & Application
· National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation & Multiple Disabilities
· Indian Olympic Association/ other such notified association
· Andhra Pradesh Chief Minister’s Cyclone Relied Fund
Donations with 50% deduction without any qualifying limit.
· Jawaharlal Nehru Memorial Fund
· Prime Minister’s Drought Relief Fund
· National Children’s Fund
· Indira Gandhi Memorial Trust
· The Rajiv Gandhi Foundation
· Donations to govt./ local authority for charitable purposes (excluding family planning)
· Authority/ corporation having income exempt under erstwhile section or u/s 10(26BB)
· Donations for repair/ renovation of notified places of worship
· World Vision India
· Udavum Karangal
Donations to the following are eligible for 100% deduction subject to 10% of adjusted gross total income
· Donations to the Government or a local authority for the purpose of promoting family planning.
· Sums paid by a company to Indian Olympic Association
Donations to the following are eligible for 50% deduction subject to 10% of adjusted gross total income
Donation to the Government or any local authority to be utilized by them for any charitable purposes other than the purpose of promoting family planning.
There are thousands of trusts registered in India that claim to be engaged in charitable activities. Many of them are genuine but some are untrue. In order that only genuine trusts get the tax benefits, the Government has made it compulsory for all charitable trusts to register themselves with the Income Tax Department. And for this purpose the Government has made two types of registrations necessary u/s. 12A & U/s. 80G.
Only if the trust follows the registration U/s. 12A, they will get the tax exemption certificate, which is popularly known as 80G certificate. The government periodically releases a list of approved charitable institutions and funds that are eligible to receive donations that qualify for deduction. The list includes trusts, societies and corporate bodies incorporated under Section 25 of the Companies Act 1956 as non-profit companies.