A taxpayer can claim deductions under section 80G, whether he/she is a resident or non-resident.
There are some rules made by the government for donation to a charitable purpose which are as follows: -
- Deduction can be claimed only if the charitable trusts or organizations are registered under the Income Tax Act.
- Only monetary contributions made i.e. in cash, cheque or demand draft are allowed as deduction. Hence, donations as donating clothes, food items, necessities etc are not allowed as deduction.
- The deduction is allowed for a donation made in cash only if donation amount is not more than Rs. 10,000. In other words, no cash donations of more than Rs. 10,000 is allowed.
There is a misconception that 100% deduction is available for every contribution made. Well, this is not true. As per Income Tax Act, deductions are available under following three categories:
1) 100% deduction for contributions made to the following: -
- Swachh Bharat Kosh (Introduced vide Budget 2015),
- Clean Ganga Fund (Introduced vide Budget 2015),
- Prime Minister’s National Relief Fund,
- National Defence Fund,
- National Foundation for Communal Harmony,
- Approved university or educational institution of national eminence,
- The National Blood Transfusion Council or a State Blood Transfusion Council,
- Zila Saksharta Samitis,
- National Illness Assistance Fund,
- The Army Central Welfare Fund,
- National Sports Fund or National Cultural Fund.
2) 50% deduction for contributions made to any specific trusts: -
- Some well-known trusts working for social cause are as follows:
- Jawaharlal Nehru Memorial Fund
- Prime Minister’s Drought Relief Fund
- National Children’s Fund
- Indira Gandhi Memorial Trust
- The Rajiv Gandhi Foundation
3) 50% deduction for contributions made to any other charitable trusts:
Many trusts work for social causes like education, health, upliftment of poor etc. If a taxpayer contributes to any of these trusts, 50% deduction is available for contributions made to these trusts.
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