Tax exemption under section 80g

A tax deduction under section 80g of income tax act is available for some contributions or donations. To be eligible for these certificates, NGOs and other non-profit organisations must register and be approved by the Income Tax Department.

Since these organisations depend on donations from businesses and people, they must take strict procedures to guarantee efficiency and openness. As they carry out charity activities, the government offers these organisations a variety of tax breaks and privileges.

In general, if you have given to section 8 businesses or organisations or charitable trusts, you are eligible for an 80g certificate that exempts you from paying taxes in part or full.

Eligibility for 80g deduction

 

Only contributions to charities that fall under section 80g are qualified for an 80g deduction and must be registered. The majority of organisations with a religious or commercial focus do not acquire 80g certificate. A similar tax benefit is not available for gifts given to trusts located outside of India. Additionally, no tax exemption is available for donations made to political parties or private trusts that are not registered under section 80G. Their taxable income will still include such contributions and donations.

Every charity trust or organisation registered under Section 80g is required, per Budget 2020, to present a statement of donations received. Based on the data provided by the charitable trust or institution, donors will be eligible for tax advantages under Section 80G.

How can one claim Section 80g tax exemption?

A gift made to a designated charity or religious organisation qualifies for tax exemption under section 80G of the Income Tax Act for an Indian taxpayer. You can request a deduction whether you're a person or a business by providing the required paperwork:-

(1) The charity trust's name and address

(2) The donor's name

(3) The amount given, expressed both numerically and verbally

(4) The charity trust's Registration Number and the duration of its legality.

Documents Needed to File a Section 80G Exemption Claim

To claim deductions under Section 80G, taxpayers must have all of the following documentation:-

(1) The recognition of gifts.

(2) If the gifts fit within the 100% category, Form 58 has to be submitted.

(3) Copies of the 80G Certificate

(4) Number of the charity trust's registration.

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