Introduction to Income Tax Deductions on Donations to NGOs

Filing taxes can be quite a taxing experience, especially for the first-timers! General information regarding various types of papers, taxation laws and amendments, accounts, investments, income tax deductions and exemptions, etc. usually bombards the taxpayer! However, knowledge and evaluation of the topic in the discussion is a useful skill that will boost an individual’s confidence to deal with the process of paying taxes. There are a few important things to know that will prove to be useful while filing income tax, especially for first-time taxpayers. Calculations on tax are based on the income earned during a financial year; the period is marked from April 1 of the present year to March 31 of the subsequent year. An Income Tax Deduction can be availed for the amounts spent on medical expenses, tuition fees, and charitable contributions. Also, one can invest in several schemes like retirement saving schemes, life insurance plans, national saving schemes, etc. The Indian Government also provides  Income Tax Deduction options to propagate the participation of commercial institutions and individuals in profitable social activities. For example, Section 80G of the Income Tax Act permits the taxpayers to contribute funds to charitable institutions, giving them tax benefits on monetary donations, which can be availed by offering proof of payment.Taxpayers can claim Income Tax Deduction under Section 80G only if their donation is made through cheque, draft or cash. While one can donate any amount to a charity/NGO, the deduction is only obtainable for a cash donation that does not surpass INR 10,000. Donation supplies like food, clothing, medical provisions, etc. are not considered under Section 80G deduction claims. To avail of this tax benefit, one must present the customary proof of payment given by the trust/entity as an attestation of the donation. One must also ensure that this proof includes the name, address, PAN Number, registration number of the trust, name of the donor and amount donated, written in figures and words. These particulars are poignant and will be required at the time of filing ITR to claim the deduction. Save the Children works to make a difference in the lives of underprivileged children, every day. It runs on donations to sustain its projects and continues setting up many more with the aim of making a difference. Any donation made by you – one-time or monthly, will be utilised by it to plan and implement projects that help benefit the disadvantaged children of India.