Sometime people end up paying considerable tax due to want of additional tax-saving options after exhausting all the investment and other options available under popular sections like up to Rs 1.5 lakh u/s 80C, up to Rs 50,000 u/s 80CCD(1b) etc.
For example, after availing maximum deductions u/s 80C, 80CCD(1b), 80D, 80TTA/80TTB (as applicable), the taxable income of an individual becomes Rs 5,01,000. On this amount, the person has to pay tax of Rs 13,208 under the Old Income Tax Regime. However, if the person would have availed tax deductions for Rs 1,000 more, he/she would have saved the entire tax.
For doing so after exhausting all the options of tax-saving investments and expenses, one need to do some charity for saving more tax u/s 80G. The donations have to be made before the end of a financial year to avail tax benefits.
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While donating, however, you need to know which options will give tax benefits on 100 per cent of donation amount and which options will give 50 per cent benefit and also up to how much amount you would get the tax benefits, how to make donations, etc.
Archit Gupta, Founder & CEO, Clear describes the best ways to give to charity and get tax deductions on them:
Details needed
Deduction is available for donation made to charities. But before you go ahead and write that cheque for donation, make sure you have the following information: Name of the donee, PAN & Address of the donee. These details must be reported while filing your income tax return so that deduction is allowed. Also remember to collect a receipt which must clearly state the amount contributed by you and the mode and details of payment made. Keep this receipt safely with you.
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Mode of donation
From financial year 2017-18 onwards, any donations made in cash exceeding Rs 2,000 will not be allowed as a deduction. The donations above Rs 2,000 should be made in any mode other than cash to qualify under Section 80G. Previously, the limit of donation in cash was Rs 10,000.
Eligible Donation Amount
The various donations specified in Section 80G are eligible for a deduction of up to 100 per cent or 50 per cent with or without restriction, as provided in Section 80G.
List of Donations eligible for 100 per cent deduction without qualifying limit:
- National Defence Fund set up by the Central Government
- Prime Minister’s National Relief Fund
- National Foundation for Communal Harmony
- An approved university/educational institution of National eminence
- Zila Saksharta Samiti constituted in any district under the chairmanship of the Collector of that district
- Fund set up by a state government for the medical relief to the poor
- National Illness Assistance Fund
- National Blood Transfusion Council or to any State Blood Transfusion Council
- National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation, and Multiple Disabilities
- National Sports Fund
- National Cultural Fund
- Fund for Technology Development and Application
- National Children’s Fund
- Chief Minister’s Relief Fund or Lieutenant Governor’s Relief Fund with respect to any State or Union Territory
- The Army Central Welfare Fund or the Indian Naval Benevolent Fund or the Air Force Central Welfare Fund, Andhra Pradesh Chief Minister’s Cyclone Relief Fund, 1996
- The Maharashtra Chief Minister’s Relief Fund during October 1, 1993, and October 6, 1993
- Chief Minister’s Earthquake Relief Fund, Maharashtra
- Any fund set up by the State Government of Gujarat exclusively for providing relief to the victims of the earthquake in Gujarat
- Any trust, institution or fund to which Section 80G(5C) applies for providing relief to the victims of the earthquake in Gujarat (contribution made during January 26, 2001, and September 30, 2001)
- Prime Minister’s Armenia Earthquake Relief Fund
- Africa (Public Contributions – India) Fund
- Swachh Bharat Kosh (applicable from FY 2014-15)
- Clean Ganga Fund (applicable from FY 2014-15)
- National Fund for Control of Drug Abuse (applicable from FY 2015-16)
List of Donations eligible for 50 per cent deduction without qualifying limit:
- Jawaharlal Nehru Memorial Fund
- Prime Minister’s Drought Relief Fund
- Indira Gandhi Memorial Trust
- Rajiv Gandhi Foundation
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List of Donations eligible for 100 per cent deduction subject to 10 per cent of adjusted gross total income:
- Donations to the government or any approved local authority, institution or association to be utilised to promote family planning.
- Donation by a company to the Indian Olympic Association or any other notified association or institution established in India to develop infrastructure for sports and games in India or sponsor sports and games in India.
The above lists consist of names of some of the prominent donees, while several other charitable organisations are there, which are eligible to take donations and provide tax benefits u/s 80G.
