Tax Deductions for Donations (Section 80G)
What is Section 80G?
Section 80G of the Income Tax Act provides deductions for donations made to specified funds, charitable institutions, and organizations. The purpose is to encourage philanthropy and social welfare activities.
Types of Donations Eligible for Deduction
- Donations to certain charitable trusts and institutions registered under Section 12A or approved by the Income Tax Department.
- Donations to the Prime Minister's National Relief Fund (PMNRF), National Defence Fund, etc.
- Donations to approved institutions for the promotion of scientific research or rural development.
Deduction Amount
The amount of deduction allowed depends on the type of donation and the organization receiving the donation. Typically, donations are eligible for a deduction of either 50% or 100% of the donated amount.
Calculation Example
If you make a donation of Rs. 10,000 to an organization approved under Section 80G for 100% deduction, you can claim a deduction of Rs. 10,000 in your income tax return.
Additional Information
- Donations must be made via cheque, draft, or electronic transfer to qualify for deduction.
- You must obtain a receipt from the organization for every donation made.
- The total deduction claimed under Section 80G should not exceed 10% of your gross total income.