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What Is 80G Of The Income Tax Act

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Know Everything About Income Tax Act 80G

One of the simplest methods to end up saving money on taxes and simultaneously contributing to the world is to make gifts to charity, which will subsequently qualify for Section 80G deductions. These must be qualified charities or entities.

Section 80G of the Income Tax Act largely concerns charitable contributions, with the goal of providing tax breaks to persons who engage in philanthropic efforts. This section provides tax breaks for donations made to certain funds or organizations. An amount contributed to a qualifying charity by a person can be reclaimed as a tax deduction when submitting an income tax return.

80G Eligibility Criteria

All taxpayers (individuals/companies/Hindu Undivided Families) are eligible to claim charitable contributions and claim benefits under Section 80G, subject to governmental restrictions. NRIs also are entitled to Section 80G deductions if their gifts are made to qualifying trusts or organizations.

Provisions Under 80G

Individuals who desire to claim deductions under Section 80G must establish that the organization to which they are contributing is covered by this Act. Donations given to recognized and authorized funds or charitable organizations are the only ones that qualified for appropriate benefits. 

Trusts and charities must be incorporated under Section 12A in order to be eligible for the 80G certificate. Individuals are encouraged to investigate an organization’s qualifications before giving to it.

Individual contributions might not always be eligible for Section 80G benefits. Contributions to foreign charities and political parties are not included under this clause, therefore individuals cannot seek tax benefits for themselves.

Allowed Deductions Under Section 80G

  1. Contributions donated within this classification are tax-deductible in full and are not subject to any qualifying limits. Contributions to the National Defense Fund, Prime Minister’s National Relief Fund, National Foundation for Communal Harmony, National/State Blood Transfusion Council, and other organizations are eligible for such exemptions.
  2. Contributions to foundations such as the Prime Minister’s Famine Relief Fund, the National Children’s Fund, the Indira Gandhi Memorial Fund, and others are eligible for a 50% tax discount on the sum contributed.
  3. Contributions to local bodies or the state to encourage family planning, as well as contributions to the Indian Olympic Association, are eligible for tax benefits within this classification. In such circumstances, savings are limited to 10% of the participant’s Calculated Gross Overall Income. Donations in excess of this amount are adjusted up to the nearest ten percent.
  4. Contributions given to any local body or the state that will be used for any charitable cause are eligible for deductible within this classification. In such circumstances, savings are limited to 10% of the participant’s Calculated Gross Total Earnings. Contributions in excess of this sum are subject to a 10% tax.

Criteria for Contributions to Qualify under 80G

For a contribution to be legitimate under Section 80G, several basic requirements must be satisfied. Some of which are as follows.

  • Contributions must only be made with a deductible or exempted earnings. Contributions made with non-taxable earnings will not be eligible for a tax deduction.
  • Just cash or check contributions are permitted, with contributions in the forms of clothing, meals, medications, and so on being ineligible per Section 80G.
  • Whenever it pertains to contributions to the Indian Olympic Association, only corporations are qualified for tax breaks.
  • Contributions given to legitimate and authorized trusts are the only ones that qualify for tax breaks.
  • Donations to international bodies and political organizations are not deductible.

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