Tax Exemption

Tax Benefits for Donations

Donating to a registered NGO not only helps in making a difference but also offers tax benefits.

1. Section 80G Deduction

Donations made to registered NGOs qualify for deductions under Section 80G of the Income Tax Act. The extent of the deduction depends on the type of NGO and the nature of the donation.

2. Types of Donations

  • 100% Deduction: Donations to certain funds and institutions (for example, the Prime Minister's National Relief Fund) may qualify for a 100% deduction of the amount donated.
  • 50% Deduction: Donations to other NGOs and charitable organizations typically qualify for a 50% deduction of the amount donated.

How to Claim the Benefit

  1. Verify NGO Registration: Ensure the NGO is registered under Section 80G and has a valid 80G certificate.
  2. Obtain a Receipt: Get a receipt from the NGO with registration number and donation details.
  3. Declare in Tax Return: Include the amount donated under Section 80G while filing your income tax return.

Example

If you donate ₹10,000 to an NGO eligible for a 50% deduction, you can claim a ₹5,000 deduction from your taxable income, reducing your overall tax liability.

By making charitable donations to eligible NGOs, you can effectively lower your taxable income while supporting causes you care about.