Tax Benefits for Donations

Donating to a registered NGO not only helps in making a difference but also offers you tax benefits. Here's how:

1. Section 80G Deduction

Donations made to registered NGOs qualify for deductions under Section 80G of the Income Tax Act. The extent of the deduction depends on the type of NGO and the nature of the donation.

2. Types of Donations

• 100% Deduction: Donations to certain funds and institutions (e.g., the Prime Minister's National Relief Fund) qualify for a 100% deduction of the amount donated.
• 50% Deduction: Donations to other NGOs and charitable organizations typically qualify for a 50% deduction of the amount donated.

How to Claim the Benefit:

Follow these steps to claim tax benefits for your donations:

1. Verify NGO Registration: Ensure the NGO is registered under Section 80G and has a valid 80G certificate. Only donations to such NGOs are eligible for tax benefits.
2. Obtain a Receipt: Get a receipt from the NGO with their registration number, details of the donation, and other relevant information.
3. Declare in Tax Return: When filing your income tax return, include the amount donated under Section 80G. Attach the receipt and mention the NGO's details in your return.

Example:

If you donate ₹10,000 to an NGO eligible for a 50% deduction, you can claim a ₹5,000 deduction from your taxable income, reducing your overall tax liability.

By making charitable donations to eligible NGOs, you can effectively lower your taxable income while supporting causes you care about.