HEALTH

Looking To Save Tax? Donate For Tax Exemption Now

I am sure that, many of us through our life, might have donated at some point or the other for a particular cause with the utmost best intentions at heart.

Tax exemption refers to, the income earned by individuals or transactions undertaken which are free from a tax on, at the federal, state or local levels.
 
Charity refers to a voluntary help, in the form of money or kind which to the needy.

Donation Tax Exemption

Donation Tax Exemption:-

 
Any person, who makes a donation that considered eligible,deemed to be eligible to get tax deductions on certain conditions. However, This is not restricted to only individuals, companies, or any specific categories of taxpayers.
 
Donations categorised into two groups to fall under the provisions of Section 80G, which are specifically:
 
  1. Donations to Private Trusts : Trusts and institutions which formed, with the primary aim of promoting scientific research, education, sports, certain professions, khadi and village industries, etc. Or hospitals and notified charitable or religious institutions entitled to total tax exemption under Section 10 of Income Tax Act.
  2. Donations to Trusts or Funds set-up by the Government : The entire amount donated is eligible to deducted from the taxable amount.
  3. Donations to Approved Research Organisations : Businessmen and Professionals, who earn income under specific heads of, Profits and Gains of Business or Professions have certain sections reserved for them. Sections 35A and 35CCA, allow a 100 per cent deduction of the amount donated, for the purposes of scientific research and rural development to approved research organisations. However, The government’s approval also needed for the same. Those who do not have, certain professions or businesses in the form of salaried income, on donating to such organisations can receive a 100 per cent deduction under Section 80G.

NGO Donation Tax Exemptions:-

There are various Non-Governmental Organisations and non-profit entities that work on various purposes. Which help to promote economic development and achieve the various social welfare goals of the government.

Thereby having various tax exemptions and incentives.

Section 80G is the most prominent of them all in India and 501(c)(3).

In addition, Here is a case study of an NGO called Genesis Foundation, which supports underprivileged children with heart defects in India. One can make donations for children to their NGO.

As per the norms and guidelines of this NGO:

For Indian Residents

The organization registered under Sections 12-A and 80G.

Section 12-A, enables non-profit organizations:

To claim complete tax exemptions according to, Sections 11 and 12 of the Income Tax Act, 1961.

Moreover, Section 80G at the same time, entitles the donors who reside in India to a 50% tax exemption.

For instance, These donors will receive a soft copy receipt for their donation amount.

Most importantly, An Indian citizen, irrespective of whether settling in India or abroad.

Who has a valid passport and wants to avail of the 80G tax exemption.  Can contribute in Indian Rupees (INR), using multiple Indian payment methods, inclusive of international credit cards.

For Foreign Nationals

 
The organisation is also registered, under FCRA which allows it to receive foreign funds.
 
Donation for children accepted on the Give India Platform.
 
All donors, who donate through this platform are instantly issued an e-tax receipt by Give India Foundation Inc. Which registered under 501(c)(3) that accepts money in the U.S.
 
 
UK taxpayers, who want to avail the Gift Aid tax exemption can make their contribution in British Pound Sterling (GBP) .
 
Gift Aid, is a government scheme that allows, the donor to reclaim the basic tax rate that you usually pay as a taxpayer.
 
A US taxpayer, who wants to avail the tax exemption under Section 501(c)(3). And citizens of other countries who have not yet considered can contribute in US Dollars.
 
Let us remember that tax benefits on donations are only a by-product.
In conclusion, let us keep in mind, the nobility of the cause and donate whole-heartedly if one believes in that cause.

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