Income Tax Section 80G: Taxpayers can get 100% tax exemption on donated amount, know full details

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According to income tax rules, if the amount is donated to a charitable trust, religious institution, then taxpayers can claim up to 100% tax exemption on it.

However, only 50 per cent tax exemption is claimed on donations made to certain institutions. The Income Tax Department has divided institutions into categories, which get tax benefits ranging from 50 to 100 per cent on the amount donated. This exemption is given to taxpayers under Section 80G of the Income Tax Act, 1961.

Taxpayers get the benefit of tax exemption on the amount donated to charitable trusts or charitable institutions as per the income tax rules. In fact, Section 80G of the Income Tax Act 1961 allows taxpayers to save tax by donating money to eligible charitable institutions. However, there are certain limits and conditions that need to be fulfilled to avail these tax deductions.

Old tax regime will have to be opted for tax deduction

Resident Indians or NRIs who have donated money to charitable trusts, religious institutions, or associations can claim a tax deduction from their gross income under section 80G. However, to claim the tax deduction, taxpayers will have to opt for the old tax regime. Taxpayers will not be able to take advantage of this deduction under the new tax regime.

Donation of cash will not get the benefit of tax deduction

Taxpayers can claim tax deduction for the amount donated in the form of cash, check or electronic mode. However, tax deduction cannot be claimed on cash donations above Rs 2,000. Therefore, while donating more amount, one should use check or electronic mode. At the same time, donations made in the form of any kind are not eligible for tax deduction.

10BE certificate will have to be given for tax exemption

To claim the tax deduction, a person should make a donation to a fund or institution that fulfills the conditions specified in section 80G(5) of the Income Tax Act. One of the conditions is that the trust, the institution receiving the donation, has to file the details of the donation for the entire year with the Income Tax Department and give Form 10BE certificate to the donor. Form 10BE certificate is required as evidence in support of deductions to be claimed while filing ITR.

100 and 50 percent tax exemption on the amount given to these institutions

The Income Tax Department has divided the trust into a category of institutions claiming 100 per cent and 50 per cent tax deduction. So first one has to see to what category the concerned trust, charitable institution belongs, which will help in determining the tax deduction percentage (100% or 50%).

100% tax exemption

Family Planning Association of India
Red Cross Society of India
Government or any local authority, institution or association for the promotion of family planning.
Indian Olympic Association
Notified association or institution for the development of sports in India.
50% tax deduction

Notified temple, mosque, gurudwara, church or other place (for repair or renovation)

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