Exemption under section 80g

A non-profit organisation (NGO) can get income tax exemption by registering and meeting certain additional requirements, but such registration offers no advantages to those who make gifts. There are certain sections in the Income Tax Act that provide tax advantages to the "donors." The benefits of these regulations should be utilised by all NGOs to draw in new funders. One of these portions is 80G.

Who may take advantage of the 80g deduction?

The tax exemption provided by Section 80 G may be claimed by the donor of an eligible contribution.

Only donations to certain trusts and organisations are eligible for a deduction under Section 80G.

Section 80g of income tax act has certain provisions which offer tax benefits to the donors.

Percentage of section 80g deduction

(a) Payments given to the Prime Minister Relief Fund are fully deductible under Section 80G with no upper limit.

(b) Tax deductions for trusts like the "Indira Gandhi Memorial Trust" are 50% off, with no upper limit.

(c) Institutions that support and encourage family planning are entitled to a 100% exemption under Section 80G if they are recognised institutions.

(d) Any charity trust included in the list is qualified for a 50% tax credit under Section 80G.

Compliance Requirements for 80g Registration

The following specifications must be met by the person applying for or receiving the 80G registration:-

(1) Only public charity trusts, registered societies, accredited educational institutions, and government-funded organisations may submit an application.

(2) The trust or organisation requesting the certificate must be properly registered in accordance with the Societies Registration Act, 1860, Section 25 of the Companies Act, or any other applicable Acts.

(3) No caste- or creed-based or religious activity may be represented by applicants for the certificate.

(4) The relevant trust/institution must only use the contributed money for philanthropic endeavours.

(5) The registered trust or institution must not keep any unrestricted revenue.

(6) In order to ensure that donations are not mistaken for other types of funds, organisations that are pursuing other companies must have a separate account.

(7) Prior to requesting the certificate, the applicant should have kept the proper records for accounting, bookkeeping, and yearly returns.

(8) The certificate holder is responsible for making sure that certifications are renewed on time in order to qualify for any applicable tax benefits.

It is high time that you shall see the notes on 80g deduction.