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Claiming Deduction U/s 80G: Key Change From AY 2018-19 That You Should Know

Roshni Agarwal

Basically everyone as per their capabilities wish to contribute for some good cause as in a catastrophic event of a natural disaster or to some NGO etc. And in lieu of such donations made taxpayers are allowed a rebate as they can claim a tax break or deduction under section 80G of the Income Tax Act 1961.

Some of the important points to note while claiming such a deduction in respect of the donation made are as following:

It is to be noted that not all donations allow such a tax benefit and also in case of institutions and charitable set-ups allowed for the purpose by the department of income tax, 100% deduction is allowed in respect of the specified list. Herein before making the donation and expecting a deduction from your taxation liability, while making the donation, you need to check the registration certificate of the institution.

Who is allowed 80G deduction?

It is to be noted that the amount of allowed deduction (being treated as donation) is reduced from the gross total income before the computation of taxable income is made. And all assessee categories are allowed rebate for the donations made to the notified organization. However, donations to political parties as well as foreign trust and funds do not qualify for such a deduction.

Mode of payment is important when claiming tax relief for donations under section 80G

Any payment via cash or cheque against donation to specified institution qualifies for section 80G deduction. Also, from assessment year 2018-19 (FY 2017-18), any contribution towards donation in cash, provides a maximum deduction of Rs. 2000. While in case of payments via digital route or through cheque, there is no limit in respect of the amount of deduction that can be claimed.

Earlier for payments in cash, there was a maximum deduction allowed of Rs. 10,000 but this has been brought down to curb false claimers who produce fake receipts to claim the benefit.

Also, there stands a limit in respect of the amount that can be claimed i.e. for contributions to government entities, 100% deduction can be claimed while only 50% can be claimed for private tie-ups. Herein there can be a further cap of the adjusted gross total income.

It is to be noted that adjusted total income is the taxable income after all deductions other than 80G are taken into consideration.

Documents required for claiming deduction u/s 80G while filing ITR

Standard receipt from the donee or trust is required. And the donor herein needs to ensure that the stamped receipt carries the registration number of the institution as well as note its validity and the PAN. This is required as a proof of the amount donated. ]
Also, ensure that the receipt bears the name and address plus the name of the donor and amount donated, written in words and figures.

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