Contributing to Charities, NGOs can save Tax
Many of us point in a life willing to spend some part of income in charity. Some people spend money in NGO to help needy people, while people invest money in NGO to save tax. Whatsoever is your reason to invest in NGO it is very necessary for the individual to contribute in charities.
It is that time of the year when you are looking for ways to save tax. You have officially exploited the benefits of save tax under area 80C, purchased a medical coverage to invest in Mutual fund under segment 80D and are searching for different ways accessible under the Income Tax Act, 1961 to spare assessment.
Another way you can save tax while benefiting good work is by investing money in NGO under Section 80G of Income Tax Act. Segment 80G of the I-T Act permits donation made to determined fund and charitable institution as a deduction from gross income.
India is a country of beliefs and devotion. To encourage people to donate in the good courses, the Income Tax Department allow one to claim exemption under section 80G. We all know the charity is a noble deed. Along with doing something in a good course, it can also help you to save taxes.
Who can avail the tax benefits?
Any individual, tax payer, entity or company can avail this deduction under section 80G of the Income tax. This deduction can be claimed from the salary, regular income and business income. The amount you donate is then cut from your taxable income. So, if you are looking to save your tax by investing in a good course and then you are thinking right. As per the provision of section 80G, any individual who earn legally and want to share some part in NGO and save tax are eligible for charity contributions.
How to make donation/ contribution so as to take deductions under section 80C?
Individuals who are seeking to donate in NGO to save tax can invest money through cheque/ cash/draft. Deduction of the sum contributed/take from Gross Total Income of the assessee for the earlier year relies upon the sort of assets/associations where such sum is contributed/given. Deduction is accessible as a specific level of commitments/donate made. With the end goal of estimation of the sum that is accessible as a deduction from Gross Total Income, we can group the findings accessible as:
- Deduction without any limit.
- Deduction with limit.
Donation/contribution to any NGO under the section 80G is also eligible as deduction from the Gross total income. However, deduction to the respect of such donation to 50% to 100% of the Net Qualifying Amount.
Deduction under section 80G:
The Government of India introduced Section 80G deduction to inspire to save tax by spending money on the NGO. Under the section 80G the amount is deducted is noted as the amount has spent on the charities. Only donation only prescribed funds qualify as a deduction. The amount donated are allowed to be claimed as a deduction at the time of filling tax return.