Tax Benefits of Charity
- 100 percent Deduction on Donations – If you give your donations to any of the following funds you will earn 100 percent deduction without any qualifying limit on the donations you make. These funds are –
- 50 percent Deduction on Donations- The following funds are those that will provide you with 50 percent of deductions on the donations you make without any qualifying limit. These are:
i. Indira Gandhi Memorial Trust
ii. Prime Minister’s Drought Relief Fund
iii. The Rajiv Gandhi Foundation
iv. Jawaharlal Nehru Memorial Fund
v. National Child’s Fund
- If you make donations for promoting family planning to a local authority or government or you donate towards the Indian Olympic Association then you would qualify for 100 percent deduction subject to 10 percent of adjusted gross total income.
- If the amount you donate to local authority or government is for any other purpose than family planning then you qualify for 50 percent deduction subject to 10 percent adjusted gross total income.
- While you make donations to NGOs you earn tax deductions. It happens so because these NGOs are government approved and they run for a social cause. The NGOs registered under section 12A or section 10(23) c) and meeting certain other conditions are also exempted from paying tax.
- Section 35AC – If you make contributions towards certain pre-approved projects that fall under this section; you can claim 100 percent deduction on the donations you make.
- Section 35CCB – This section caters to NGOs who are involved in working towards aforestration and conservation of natural resources. If you make any donation for this purpose you qualify for claming 100 percent deduction.
- While you donate for a social cause it is important for you to get the receipt of your donation in order to claim a tax deduction. The receipt should bear you name, the name of the trust, the amount donated and also the registration number of the trust as per Section 80G.
- If you are a salaried person and have contributed your bit towards the charitable fund from your salary and if the donation receipt bears the name of the company, even then you are subject to a deduction under Section 80G and are entitled to claim the same.