What are income tax benefits available on donations made?
Donations made to any political party or a foreign trust does not qualify for this deduction. Contributions towards the PM CARES Fund are 100% exempt under Section 80(G). Many people have lost their livelihoods during this pandemic and it is our moral responsibility to contribute to those in need. Under Section 80G of the Income Tax Act , the government also gives some tax benefits on the donations given. This can be availed by those availing the old tax regime.Any taxpayer, individual or non-individual, who makes an eligible donation can avail the tax benefits subject to the limits and conditions of the Income Tax Act.The donation must be made in monetary terms. Donation up to Rs 2,000 can be made in cash, but any amount above that must be made through cheque, bank transfer, etc.A deduction of 50% or 100% of the amount contributed can be availed as a deduction. Donations to certain organisations may also be restricted to an upper threshold for claiming tax deductions, depending upon the gross total income of the taxpayer. For example, a donation to PMNRF is eligible for 100% deduction without any limit. However, donation to a notified temple/mosque/gurudwara/church or such place for repairs or renovation is eligible for 50% deduction subject to 10% of the gross total income of the taxpayer.The institution to whom the donation is being made must issue a receipt to the donor which acts as documentary proof for claiming the deduction. The receipt issued should have the details like name, address and PAN of the doner, besides the donation amount. (Content on this page is courtesy Centre for Investment Education and Learning (CIEL). Contributions by Girija Gadre, Arti Bhargava and Labdhi Mehta.)