- There are several ways to save tax from investments to buying health insurance.
- One of the easiest ways to save income and do a good deed is to donate.
- Section 80G of the Income Tax Act allows taxpayers to gain relief if they donate to specified charitable relief funds and institutions.
With only 6 months left to file the income tax return, people are desperately looking for options to save income tax. There are several ways to save tax from investments to buying health insurance. One of the easiest ways to save income and do a good deed is to donate.
Section 80G of the Income Tax Act allows taxpayers to gain tax relief if they contribute to specific charities and institutions. The deduction is calculated from gross income.
However, this benefit can be availed if a donation is made to entities listed by the government. Contributions to foreign trusts and political parties do not qualify for tax relief.
In order to claim the income tax benefit you should submit Income Tax Return with name of the donee, PAN of the donee, address of the donee, and amount of contribution while filing Income Tax Return.
Deduction limit: 100% deductions without any limit
| Some donations to funds like National Defence Fund, Prime Minister’s Relief Fund, National Illness Assistance Fund, etc. are eligible for 100% deduction on the amount donated.
| - National Sports Fund
- National Cultural Fund
- Fund for Technology Development and Application
- National Children’s Fund
|
100% deduction with qualifying limits to 10% of adjusted gross total income:
| Donation made against government or any approved local authority, subject to certain qualifying limits
| Indian Olympic Association orany other notified association or institution established in India for the development of infrastructure for sports and games in India
|
50% deduction without qualifying limits to 10% of adjusted gross total income:
| Donations to funds like PMs Drought Relief fund, Rajiv Gandhi Foundation are eligible for 50% deduction.
| - Jawaharlal Nehru Memorial Fund
- Prime Minister’s Drought Relief Fund
- Indira Gandhi Memorial Trust
- The Rajiv Gandhi Foundation
|
50% deduction with qualifying limit:
| Donation made against local religious organisation/authorities, subject to certain qualifying limits
| Repairs or renovation of any notified temple, mosque, gurudwara, church or other places.
|
Note: Here the qualifying limit is 10% of the gross total income of the taxpayer.
See also:
Budget 2020: Five charts that explain what you can expect from India’s defence expenditure this year
