Tax planning is a crucial component of money management, and donations made under Section 80G of the Income Tax Act are among the best strategies to lower your taxable income and give back to the community. In order to optimize savings and social impact, Sahil Jain Associates assists both individuals and corporations in navigating the complexity of tax deductions.
Section 80G: What is it?
Donations to designated relief funds and charity organizations may be deducted from their gross total income by taxpayers under Section 80G of the Income Tax Act of 1961. Depending on whether the charity qualifies under this clause, the deduction may be 50% or 100% of the donation amount.
Approval of 80G Deductions
Section 80G allows deductions for both individuals and businesses, including HUFs, corporations, firms, and other entities. However, deductions are not available for cash donations over ₹2,000. For contributions to be accepted, they must be made via cheque, demand draft, or electronic payment.
Types of Deductions Under 80G
1. Unlimited 100% Deduction
Contributions to designated funds are 100% deductible, with no upper limit on the taxpayer’s income. Here are a few instances:
- Prime Minister’s National Relief Fund
- National Defence Fund
- Swachh Bharat Kosh
- National Foundation for Communal Harmony
2. Unlimited 50% Deduction
Without affecting income, some donations are eligible for 50% deductions. For instance:
- Jawaharlal Nehru Memorial Fund
- Prime Minister’s Drought Relief Fund
3. Complete Deduction (Up to 10% of Adjusted Total Income)
A 100% deduction is available for donations to some government-approved organizations, however only up to 10% of the donor’s adjusted total income may be deducted. Any sum over this cap will not qualify for a deduction.
4. A 50% Deduction (Up to 50% of 10% of Adjusted Total Income)
In this instance, the deduction is limited to 50% of 10% of the adjusted total income.
How to Make an 80G Deduction Claim
- Include the donation’s details in the relevant section of your income tax returns (ITR).
- To support your claim, confirm that the trust or NGO is registered under Section 80G.
- Save all required certifications and receipts for use as evidence.
Why Get Advice on 80G Tax Benefits from Sahil Jain Associates?
Sahil Jain & Associates offers professional help in the following areas:
- Tax planning to optimize tax savings and promote charitable causes.
- Making sure that laws governing charitable contributions are followed.
- Assisting companies in combining 80G benefits with CSR (Corporate Social Responsibility).
- Helping people select the best organizations to donate to in a tax-efficient manner.
By taking advantage of Section 80G deductions, you can save a lot of money on taxes while simultaneously helping to develop the country. Contact Sahil Jain & Associates right now to find out how to maximize your tax-saving plan through donations!
