Tax Benefits under 80G Explained – Benefits of Charity
Most of us realize at some point in time in their lives that the selfless deeds are truly compassionate to make our own lives better.
The selfless deeds are meant as in Charity or donations. There’s been a tremendous rise in charitable donations by people around the globe.
Even governments of many countries (almost all countries) encourage their citizens for charity deeds.
In India, we have tax benefits under section 80G.
Let’s understand the Tax Benefits Under 80G
Section 80G –
All of you whether you are an individual, an NRI or a member of HUF and you are making donations that are eligible can earn a deduction up to 50 percent or 100 percent on your taxable income. However, the percent of deduction you get eligible for would depend upon the charitable institution which you are contributing to.
It is important for you to pay out your donation from exempted or taxable income. You should also remember that whatever donation you pay needs to be in cash or through cheque. Anything gave in kind as a donation would not make you eligible for claiming a deduction.
Subsections to Section 80G:
Contrary to popular belief section 80G of Income-tax laws is not just limited to donations made to charities. There I also a rebate on donations made to entities engaged in scientific research and rural development activities. In fact, they get you a 100% tax deduction under Section 80GGA. This is also supplemented by Section 80GGC which gives a 100% tax deduction for donations made to any political party registered under section 29A of the People Act 1951.
How does an NGO qualify for tax exemption?
For an NGO to receive tax-exempted donations it needs to fulfill certain criteria. It should be formally registered under the Societies Registration Act 1860 or under section 25 of the Companies Act 1956. All the NGOs’ sources of income should be through permissible means. All income and assets of the NGO must be used for only supporting humanitarian causes. The NGO must not spend exclusively for a particular religious community or caste. All accounts of the NGO must be clearly maintained and be transparent.
So start your charity today and avail tax benefits with SSGMV.