Tax concessions for contribution to charity

Approved donations can reap useful tax savings to all taxpayers, whether resident or non-resident

- JIGAR MUKESH PATEL

Donations to approved funds & institutions

Section 80G of the Income-tax Act provides for deduction out of gross total income in respect of donations to approved Funds and Charitable Institutions. The benefit of this deduction and consequential tax saving is available to any taxpayer viz. individual, HUF, company, firm, etc. Even NRIs are eligible for deduction under Section 80G, as long as they made a donation to eligible institution. It needs to be borne in mind that the eligible donation for this purpose should be in the form of money and not in kind (food, medicines, clothes, other goods etc.).

No deduction for cash donations exceeding Rs 2,000

With a view to curtail the use of cash for the above purposes and to bring more transparency with respect to donations, Section 80G specifies that any payment exceeding a sum of Rs. 2,000, shall be allowed as a deduction, only if such sum is paid by any mode other than cash.