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Section 80G - How to avail its benefits

The Income Tax Act's favourable Section 80G enables companies to deduct some capital expenditures.

The Indian Government encourages people to give and this donation can also be claimed as a deduction under Section 80G, in order to promote the idea of generosity towards the poor and the needy.

Donations made to designated organisations, ensures that the money is used for proper goals as there are many Government and Non-Governmental Organisations (NGOs) that work to elevate the disadvantaged.

The Government also permits income tax deductions under Section 80G for the amount donated in order to encourage people to donate. When a person files their income tax return, they are permitted to claim their donation as a deduction under Section 80G.

Any taxpayer (individual, partnership firm, Hindu undivided families, company, Limited Liability Partnerships, etc.) may claim this deduction, regardless of whether they receive income from a salary or a business.

Who is eligible?

There may not always be a cap on the amount of the deduction that can be made for contributions made in accordance with section 80G. However, in other circumstances, the Section 80G deduction for donations is capped at 10% of the taxpayer's adjusted gross total income.

However, in some cases the full deduction is allowed of the amount donated whereas in some cases only 50% of the amount donated can be claimed as a deduction.

Donations that benefit a taxpayer

Are you thinking about giving donating to lower your tax burden? It is better to have a few things in mind as reminders. The most desired solution is one that reduces tax expense. The following are some tips to help reduce taxes.

Plan donation

It is usually advisable to organise one's charitable donations effectively to get the greatest benefit. In this method, "out of pocket" costs can be reduced.

Reimbursement for transportation costsVehicle expenses may be claimed if a person donates their time to an NGO or charity organisation. Accurate records of the automotive expenses associated with the organisation's activities must be maintained in order to achieve this.

Every donor is given a receiptGetting a receipt for every donation should be a habit for every taxpayer. The person's records will be reinforced in this way. Additionally, there will be reliable proofs to support gifts in the event that the records were audited. Cancelled cheques or other documents may be preserved for lesser donations. Maintaining records and receipts is essential for larger donations because they would otherwise not be accepted.

How does donating to Akshaya Patra benefit a taxpayer?Fifty percent of any donation made as an individual or corporation to Akshaya Patra can be deducted when income tax return is filed. This NGO is registered under the Indian Trusts Act of 1882 and Section 12A(a) of the Income Tax Act of 1961. Since 2000, Akshaya Patra has provided Government school children with mid-day meals as an implementing partner of the PM POSHAN Abhiyaan (formerly known as the Mid-Day Meal Programme).

This financial year, ensure that every child has access to at least one nutritious meal a day and education, by donating to Akshaya Patra. In addition, you can also donate towards the health and well-being of homeless mothers and other programmes. Donate and save tax, under Section 80G of Income-tax Act!

FAQs on Section 80G

1. What is Section 80G?Section 80G is a section of the Income Tax Act that allows private companies to avail benefits such as tax holidays, deductions and exemption from filing returns.
2. What are the benefits of Section 80G?Some of the benefits of Section 80G are tax holidays, deductions and exemption from filing returns. These benefits can help companies attract foreign investment, reduce their tax liability and boost their bottom line.
3. How do I apply for Section 80G?To apply for Section 80G, a company must submit an application to the Income Tax Department.
4. What are the requirements for applying for Section 80G?The requirements for applying for Section 80G vary, depending on the type of company. However, most companies must have a registered office in India and must have been in operation for at least two years.
5. What are the benefits of availing deduction under Section 80G?The benefits of availing deduction under Section 80G are manifold. Some of the benefits are tax holidays, deductions and exemption from filing returns. These benefits can help companies attract foreign investment, reduce their tax liability and boost their cause.

The Akshaya Patra Foundation is an Indian Ngo implementing the Mid-Day Meal Programme. Your support to Akshaya Patra can potentially improve lives of millions of children across India and also avail you tax exemption.