Section 80G: Deduction for Donation
The government allows deduction on the donations made by the people and philanthropists. The deduction on donations can be claimed under Section 80G of the Income Tax Act, 1961. This deduction is allowed to all assessees making the donation and is not restricted to a particular group of people, community, society, etc. It should be noted that the donations made to the foreign trusts and political parties are not allowed as deduction. Under this Section, only donations made to prescribed institutions are allowed for deduction. The donation can be claimed for deduction if the amount donated exceeds 10% of the gross total income.
Documents Required for Deduction
Stamped Receipt- A receipt issued by the recipient is a must for claiming the deduction under this Section. The receipt should include name, address, PAN, amount donated by the donor. If the donation made is 100%, then the recipient should also provide Form 58. It should be noted that 100% deduction is not allowed without Form 58.
Registration No. under 80G on the receipt- The most important is the registration no. issued by the Income Tax Department under Section 80G. This no. should be printed on the receipt. The registration no. is issued for 2 years only; hence it has to be renewed every year. It is important to mention the validity of the registration in the receipt.
Photocopy of the 80G Certificate- It is advisable to attach a photocopy of the 80G along with the receipt.
Donations that are made only in cash are allowed for deduction and not the donations made in kind. Following are the deductions that are entitled for deduction under Section 80G:
- Donation made by NRIs- NRIs are also allowed to claim the deduction under Section 80G in India.
- Donation made by the employees- The deduction is allowed on the donation made from salary by the employees, provided that a Certificate has been provided by the employer to the employee stating that the donation had been made by the employee.
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Amount of Donation under Section 80G
The donations made to specified institutions under Section 80G are eligible for deduction but there is limit to the amount that can be claimed for deduction. There are four categories under which the donations can be made:
- 100% deduction without any qualifying limit.
- 100% deduction subject to qualifying limit.
- 50% deduction without any qualifying limit.
- 50% deduction subject to qualifying limit.