How Making Donations Can Help You Reap Savings on Your Taxes?

Pankaj Mittal By Pankaj Mittal, 26th May 2016 | Follow this author | RSS Feed | Short URL http://nut.bz/1j5om55w/
Posted in Wikinut>Business>Accounting & Finance

The Income Tax Act has a number of provisions which offer tax benefits to donors. And, donations made under Section 80G is one such provision.

Tax Saving benefits for donations made under Section 80G

Although donations shouldn't be made by keeping tax saving reasons in mind, but this kind of benefit is undoubtedly hard to be ignored. The Income Tax Act has some provisions which provide tax benefits to donors. And NGOs make use of this advantage to draw potential donors. Donations made under Section 80G offers one such provision.

Donation under 80G: Permissible for all kinds of Assesse:
Individuals are able to claim tax benefits for donation made to charitable organizations that are registered under Section 80G. Any individual who makes an eligible donation is allowed to get tax deductions depending on conditions. This section does not limit the deduction to individuals, companies or any particular category of taxpayer. NRIs are allowed to claim for this deduction, as well.

Documents required for claiming deduction under Section 80G
For claiming deduction under Section 80G, the necessary documentation need to be ensured. An acknowledgment issued by the receiving trust is a must. The vital requirement is the Registration number issued by the IT Department under Section 80G. This number should be printed on the acknowledgment. In general, the IT Department issues the registration for a limited time period (of two years) only. After that, the registration has to be renewed. The receipt should not just mention the Registration number; however the validity period, as well. The donor should make sure that the registration is legal on the date on which the donation is made.

With Section 80G, the Government is making an attempt to minimize the gap between the money demanded by the poor and money given by the donors, by encouraging more people to make a contribution to charitable groups.

Making a contribution to charitable institutions is a moral act. So what’s stopping you, just donate and make the most of income tax deductions which come with this good effort.

Tags

Deduction Under Section 80G, Donation Under 80G, Donations Benefit India, Tax Saving Plan

Meet the author

author avatar Pankaj Mittal
I am working with a Software & Web Development Company in India that provides web services to businesses all over the world.

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Comments

author avatar Randhir Bechoo
2nd Jun 2016 (#)

Interesting page.The same principle is followed in South Africa.

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