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Tax Advantages of Donation in India

The human beings have stepped on the moon and sun on one side, the flip side of the coin shows that many children are living without having even basic necessities and education. The silver line in the cloud here is that some gentle souls who are financially strong like to donate some part of their hard-earned income to these underprivileged children as donations. The good part this that with the help of these, they can avail some tax benefits too. Let’s discuss further, how one can avail of The Tax Advantages of Donating to Underprivileged Children as under:

Need to donate the Underprivileged Children:

There are billions of children across the globe living their day-to-day lives in hell-like situation. They are forced to live in extreme poverty without having proper education, and health & wellness facilities too. But a small amount of donation made by people can bring a big smile to their innocent faces. With the help of these drops of donations in the vast sea, they can arrange their basic needs like food, shelter, medical facilities and education. The collective amount of donations to the Underprivileged Children can help them hone their skills and make them live a normal life with a bright future.

How Donations Become Tax-Saving Income:

To extend and promote charity, the Indian government has made provisions of many types ofexemptions in the Personal Income tax rules every year. These exceptions are mentioned in Sec 80G and 80GGA of the Income Tax of India. After applying these tax-saving donations as deductions, one can minimise their taxable income in a very easy manner. These deductions are varied upon the nature of the organisation and the percentage of the same deduction mentioned in section 80G and/or 80GGA.

Ways to Increase Tax Savings Income:

1. Select Genuine Organisations:

To Claim tax deductions under Section 80G you need to select a genuine and registered organisation for donationpurposes. Besides that particular organisation should be eligible for tax deduction also. Before doing a monetary charity to any organisation, we caution you to always double-check their credentials very carefully. Organisation for Rehabilitation of handicapped children & women is such type of organisation which since 2012 has been actively serving in the area of underprivileged children in society.

2. Record all Documentation:

You need to keep all documents in the form of payment acknowledgement receipts against the donation you have given to the organisation very carefully with you. These are the supportive documents to claim your tax saving deductions while filing the income tax rebate.

3. Assess your upper limit:

Before making any donation, you should assess, up to what amount you need to donate. Any donation amount, which crosses 10% of your gross total income is not considered a tax deduction amount. that is the reason, you should design your donation plan very carefully and appropriately.

4. Consistent Donations:

When your purpose of the donation is to build tax-saving income then instead of only one or two months, you should spread your donation across the twelve months of the year. With this not only your charity will become a consistent practice but this will also support it in a real sense.

Read more: Mother’s Guide to Raising a Special Child | Skill Development by ORHCW

In a NutShell:

Giving a portion of our income to someone is not just an act of generosity but also a way of giving back to society. Donating to underprivileged children is considered a significant form of charity. This not only benefits a section of society but also helps individuals save on taxes. If we donate consistently to registered organizations, we must ensure that we obtain and maintain proper acknowledgement receipts for these donations. The Indian government provides tax rebates under sections 80G and 80GGA to encourage more donations of this kind.

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