Today we discuss on 4 type of donation for tax saving in income tax. what are the various kind of the donation a person can do and what will be the procedure for the donation.
Various kind of Donation in income tax act 1961
(1) Donation under section 80G
In this government notify certain certify certain educational, religious, relief welfare trust etc. Details of the name of the notified trust you can get here – Notified trust .
If assesse has donate in the given above trust benefits available to him will be –
Who can claim the benefits?
Every person can claim the benefits of donation done under trust approved under section 80G. An NRI can also claim the benefits.
Note in 80 G there are four types of trust –
a) 100% deduction without any qualifying limit.
b) 50% deduction without any qualifying limit.
c) 100% deduction with qualifying limit.
d) 50% deduction with qualifying limit.
In india most of the trust are covered under d 50% deduction with qualifying limit. Provision for the (d) category is given below –
Benefits available – He can claim Deduction in income tax of 50% of the amount donated subject to maximum limit.
Maximum limit – He can claim maximum deduction up to 10% of the adjusted Gross total income. Here adjusted GTI means total income of the person less deduction already claimed. In short Maximum deduction available is 10% on net taxable income.
(2) Donation under section 80GGA
In this government has certified certain scientific research or rural development organization. If you donate in any Notified trust in section 35AC you can claim the benefits. Click on the link to see Definition of Notified trust .
Who can claim the benefits?
It is available to the entire person except to the person who has income from business and profession. It is not available to the business man, available to the person having salary, interest, and house property rent income.
Benefits available – If the assesse has donated in the 80GGA trust he can claim 100 percent deduction of the amount donated
Maximum limit – There is no maximum limit of donation in that trust.
(3) Donation under section 80GGB
Deduction available under section 80GGB – If donation given to the registered political party. Political party should be registered under 29A of the Representation of the People Act, 1951 (43 of 1951.
Who can claim the benefits?
Donation given by any Indian company can claim the benefits under this section.
Benefits available – If the assesse has donated in the 80GGB trust he can claim 100 percent deduction of the amount donated
Maximum limit – There is no maximum limit of donation in that trust.
(4) Donation under section 80GGC
Deduction available under section 80GGB – If donation given to the registered political party. Political party should be registered under 29A of the Representation of the People Act, 1951 (43 of 1951.
Who can claim the benefits?
Donation given by any person except local authority and every artificial juridical person wholly or partly funded by the Government to the political party.
Benefits available – If the assesse has donated in the 80GGC trust he can claim 100 percent deduction of the amount donated
Maximum limit – There is no maximum limit of donation in that trust
Query in Donation?
Is Donation paid in cash is allowed in income tax act 1961?
Donation only up to 10,000 paid on a whole year is allowed in cash.
Is Donation in Kind is allowed in income tax act 1961?
Donation in kind is not allowed. Only donation by way of payments is allowed.
Can a person claim deduction in more than two section?
Yes , a person can claim the deduction in more than two section.
Documents required for claiming Donation
- Donation receipts (Registration number of the trust should be mentioned in the receipt and Donation receipts should be duly signed and stamp. It should contains name, address and Pan Number of the trust as we as donor)
- Extract of bank statements, copy of cheque etc.
- Registration certificate of the trust – Pls take the Registration certificate of the trust and check on the income tax website whether the same is registered or not. Also check the validity of the trust. Before 2009 every year renewal to be done after 2009 renewal is not compulsory.
