Benefits of section 80g

If you have donated to charitable trusts or other organisations that are authorised to provide you tax exemptions, you may be excluded from paying taxes in part or whole under the terms of an 80g certificate. You can use section 80g tax exemption if you are a charity organisation or trust that is registered under section 12A. There is a cap on how much may be deducted, though. The requirement is that you cannot receive a tax advantage for excess donations if the total of your donations exceeds 10% of your gross income.

In 1967–1968, 80g certificates entered the statute book, and they remain a crucial tool for tax savings today. By registering as an NGO and meeting certain additional requirements, it is possible for it to receive an exemption from paying income taxes; however, the donors are not benefited from this registration. Certain parts of the Income Tax Act grant tax advantages to the "donors." To entice potential funders, all NGOs should make use of these advantages. One such section is section 80g.

Here is a good article on 12a.

A person or organisation making a gift to an NGO will have 50% of their taxable income deducted if the NGO registers under section 80g. Finance Act 2020 has made some significant modifications to the registration procedure and the time period for which approval would be given, whereas before, registration under 80g was only issued once unless any particular limits were mentioned in the registration certificate itself.

Who is not eligible for section 80g tax savings?

(a) Section 80g tax benefits are not available if a contribution is made to a foreign trust.

(b) You cannot take advantage of or claim a deduction for donations given to one or more political parties. Even the printing or publication of brochures, flyers, and booklets cannot be claimed as a deduction.

(c) NRI contributions to qualifying trusts and institutions are likewise free from taxes under section 80g.

(d) Employees may claim a deduction under section 80g if a gift is made with pay and the employer's name appears on the donation receipt.

To the Principal Commissioner or Commissioner shall be presented an application for a new registration under section 80g. Organizations will be granted a three-year temporary registration. Once approved, the registration is good for three years starting with the Assessment Year from which it was requested. The renewal of such a new registration must be requested at least six months before the validity term expires or within six months of the start of operations, whichever comes first.

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