Donate Now & Secure Tax Benefits
21 Jun, 2022 . 3 min read

Donate Now & Secure Tax Benefits

Giving feels Nice!

Do You Know All your Donations Gets You Extra Tax Saving? How?

The Government of India allows you to claim income tax deductions u/s 80G on donations made to specified funds and charitable institutions.

What is Tax Exemption?

Tax-exemption refers to income or transactions that are free from tax and exclude certain income, revenue, or even taxpayers from tax altogether.

What is section 80G of the income tax act?

Section 80G of the income tax provides an income tax deduction to the taxpayers on donations made to charitable institutions and specified trusts / certain funds, etc. This deduction is available to all types of persons. 

Who can claim a deduction under Section 80G?

Any person can claim a deduction u/s 80G. It may be an individual, HUF, Company, etc. Even non-residents are also eligible for this deduction. The only condition is that the donation must be made in specified funds & institutions only.

What types of donations are eligible for the deduction under section 80G?

Donations must be for charitable purposes only, donation with a Religious purpose is not considered a relevant category for Tax exemption. Donation in cash is allowed up to Rs. 2000/- only. For an amount greater than the same, the contribution must be made in the form of a cheque, digital payment, or demand draft to claim tax benefit.

How much deduction is allowed under section 80G?

One can donate without any limit. Some donations are allowed 100% deduction while some have limits of exemption.

How many deductions will I get if I Donate?

You can claim deductions under these two broad categories:

  • Donations without qualifying limit: According to the charitable institution where the donation is made. 50% or 100% of the total contribution made can be deducted, without any other limitation
  • Donations with a qualifying limit: 50% or 100% of the total contribution can be tax-deductible, in accordance with the charitable organization where the donation is made. You should note that the amount deducted in this type is limited only to 10% of your gross total income

How do I know the qualifying Limit?.

The qualifying amount with limit will be lower than the following two amounts:

  • Donation amount
  •  10% of adjusted gross total income

Click here to know how to calculate adjusted gross total income.

Here is an example with a comparison of Taxable income before and after donation to all categories of organizations. 

Conclusion: Donation allows you to claim a tax deduction on charitable contributions made during the fiscal year when you file your income tax 

Click here to use AasaanWill Calculator to know your taxable income. 

How to Donate to a Charity through your Will?

Do you know you can donate to a charity or nonprofit organization by naming them as a beneficiary in your Will. These bequests to charity are often called planned or legacy gifts and they’re a meaningful, effective way to create a lasting legacy, both for yourself and for causes that are close to your heart.

AasaanWill has helped charities to raise their funds. If you’d like to join the 10,000 people who have already made their will on our website, you can get started here.

Organizations to get Tax deductions are approved by Govt. of India on the basis of Category, a few examples are mentioned in the Table below:

Take this budding step and donate to your favourite charities through your Will and secure some tax benefits. Write your Will with us at AasaanWill. Zaroori Hai!

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