All You Need to Know About Charitable Donations

 Donating to charity is a wonderful act of kindness. Not only God but the IT department of India also accepts this fact. As a result, charitable donations provide more than just good karma. Section 80G of the Income Tax Act provides a tax deduction for contributions made to the top charity organizations in World listed in the Income Tax Act of 1961. 

tax deductible donation


What are Charitable Donations?

Donations to certain relief funds and charity organizations are tax deductible donation under Section 80G of the Income Tax Act. However, not all donations are eligible for section 80G deductions. Donations to specified funds are the only ones that qualify for a tax deduction. This deduction is available to all taxpayers, including individuals, corporations, partnerships, and sole proprietorships.


Who is Eligible to Pay?

Not all donations qualify for a full tax deduction. Some are limited to 50 percent of the amount contributed, while others qualify for the same deductions but up to a maximum of 10% of the taxpayer's estimated gross total income. Section 80G of the Income Tax Act contains a mandated list of such institutions.


Mode of donations

  • Tax deductions are only available for donations given in cash or by check. Cash donations, on the other hand, do not qualify for a tax deduction in excess of Rs. 10,000.

  • Donations made in kind do not eligible for a tax deduction.

  • Donations in cash in excess of Rs. 2000 would no longer be eligible for tax deduction beginning in the fiscal year 2020-21. Donations in excess of Rs. 2000 should therefore be made in any manner other than cash in order to qualify for a deduction under section 80G.


How to Claim This Deduction?

To claim a deduction on your income tax return, you must provide the following information:

  • The donee's name (the institution receiving the donation)

  • PAN of donee

  • The address of the donee

  • The amount of contribution


Remember, your contributions can make a world of difference in someone’s life.

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