Donations & 80G Exemptions: A Quick Guide

The Income Tax Act provides section 80G as a facility to claim tax deductions for some of the contributions you have made as donations. The Government of India introduced it to encourage people to contribute to worthy causes and avail income tax relief. According to the Act, the 80G deduction is only applicable to donations made towards the specified relief funds and charitable institutions. Therefore it is essential to understand that all charitable contributions are not eligible for the deduction, and it applies only to prescribed funds.

The donated amount can be claimed as a deduction under Section 80G when filing the income tax return by taxpayers such as individuals, partnership firms, companies, etc. From the FY 2017–18 onwards, donations made in cash that exceed INR 2,000 are not available for deductions. To qualify under section 80G, donors must donate exceeding INR 2,000 in modes other than cash. The 80G also specifies tax deductions of up to either 50% or 100% with or without restriction to various donations made.

Although taxpayers have been donating to charitable organizations of their choice that qualify under the 80G for a long time, donation-based crowdfunding platforms using social media to raise funds for worthy causes are on the rise.

Crowdfunding makes it easier for like-minded people to donate money to a cause and even avail a tax break if the organization that receives the donation has a valid 80G certification. Charitable organizations that can give you an 80G deduction have to be registered with the tax department. The organization will provide the details of the eligibility at the time of receiving the donation. You can also verify the same on the tax portal. It is possible to claim a 50–100% deduction on the gross annual income with or without an upper limit depending on the charitable organization.

While it is good to contribute to the cause you are most compelled to, it is essential to know that your donations will benefit the cause to its fullest. Therefore, donating to a trusted platform that is 80G certified will ensure that your funds go to the right place and you get a tax deduction.

So visit Donatekart and choose any of the hundreds of causes to support and avail a tax deduction at the same time. The process is entirely transparent, and you receive an update from the campaigner after you donate to the product. Once the donation is successful, you will find a ‘GET 80G’ button on the payment page. After filling in the essentials, such as the PAN number and address, the donors need to click the submit button to complete the process. Your 80G certificate will be downloaded automatically, and they will also send a copy to your email. Donors can use the certificate to claim tax deductions while filing the ITR.