Tax Benefits of Charitable Giving

Many people donate to a cause that they sincerely believe in and do their part for the betterment of society. Donating to a good cause comes with rewarding benefits for them. The government appreciates such support towards charitable services and allows income tax exemption under section 80G of the Income Tax Act.

If you contribute to the welfare of less fortunate people or extend your support to a cause that you care about, you are eligible for tax benefits. Tax rebates are given to you only if the donation is given to the right place and provides help to people with fewer means.

What is Section 80G?

Section 80G of the Income Tax Act gives a tax deduction for donations made to certain charitable trusts by an individual.

Any taxpayer who donates to a certain charitable trust can get a tax exemption under this section. NRIs are also eligible for a tax rebate under this act. The organization to which the individual is donating funds must fall under the ambit of the section to qualify for a tax deduction.

It is important to know that some donations do not fall under the tax exemption bracket as per the Income Tax Act, such as donations made to political parties or foreign charitable trusts.

Options to Donate

You can donate to any cause that you want to, including child education, women’s safety, elderly care, and the welfare of differently-abled people. Many NGOs are working tirelessly at the ground level to provide support to the needy. Every penny donated for a particular cause is utilised to provide necessary resources to underprivileged people.

These NGOs provide tax exemption receipts to avail of tax benefits. You can get a 50–100% tax deduction as per the rule under Section 80G.

Documents Required to Get Tax Benefits under Section 80G

· Tax exemption receipt

· Form 58

· Trust’s registration number

Acceptable Mode of Payment under Section 80G

· Cash donations of more than Rs. 2,000 do not qualify for a tax deduction.

· For donations exceeding the amount of Rs. 2,000, any mode of payment is acceptable, barring cash payments.

· Donations of necessary supplies or resources like food, medicine, or clothes are not tax-deductible.

The government recognises the good deeds of an individual and extends its support to a noble cause. You can contribute to an NGO’s donation program or relief funds to make a difference in the lives of underprivileged people.