Income Tax Exemption on Donations (NGO) under Section 80g
- 47 Comment
Introduction
In this blog I will be writing about the Section 80g which presents the laws for tax exemtions on donations and fund spent on the NGOs. You will get the tax exemptions benefits when there is a donation for NGO’s. This law would encourge people to donate more fund for NGO’s and most of the companies run NGO’s to avail this benefit. This blog will explain the key points related to the donations and tax exemptions on that. If you have any questions on section 80g please post it in the comments section. Please subscribe to our future articles here.
Register Under Section 80g
The organisation to be registered under the Section 80g. If the organisation is registered under the Section 80g, the person or company making donations to such organisations are eligible to claim the Tax Exemption on the amount they donated. But, there is certain restrictions on how much can exempted from the whole donations are subject to the Income Tax rules under Section 80g. Please read the following sections to learn more about the details.
Conditions on Section 80g
There is few conditions to be fulfilled under the Section 80g.
- The NGO should not have any income which are not exempted, such as business income. If, the NGO has business income then it should maintain separate books of accounts and should not divert donations received for the purpose of such business.
- The bylaws or objectives of the NGOs should not contain any provision for spending the income or assets of the NGO for purposes other than charitable.
- The NGO is not working for the benefit of particular religious community or caste.
- The NGO maintains regular accounts of its receipts & expenditures.
- The NGO is properly registered under the Societies Registration Act 1860 or under any law corresponding to that act or is registered under section 25 of the Companies Act 1956.
Tax Exemption Limit on Donations
There is a limit on how much money can be exempted from the Income Tax.
- If the amount of deduction to a charitable organisation or trust is more than 10% of the Gross Total Income computed under the Act (as reduced by income on which income-tax is not payable under any provision of this Act and by any amount in respect of which the assessee is entitled to a deduction under any other provision of this Chapter), then the amount in excess of 10% of Gross Total Income shall not qualify for deduction under section 80G.
- The persons or organisation who donate under section 80G gets a deduction of 50% from their taxable income. Here at times a confusion creeps in, that the tax advantage under section 80G is 50%, but actually it is not so. 50% of the donation made is allowed to be deducted from the taxable income and consequently tax is calculated.
- The ultimate benefit will depend on the tax rates applicable to the assessee. Let us take an illustration. Mr. X an individual and M/s. Y Pvt. Ltd., a Company both give donation of Rs. 1,00,000/- to a NGO called Satyakaam. The total income for the year 2003-2004 of both Mr. X and Ms. Y Pvt. Ltd. is Rs. 2,00,000/-. Now assuming that the rates are 30% for the individuals and 40% for the Companies without any minimum exemption limit.
Also Read:
Income Tax Exemption and Rules on Gifts
Summary
Thank you for reading this article. I hope now you have good understanding on how to calculate the Tax Exemption on the donations. Don’t stop just reading the article. Please donate to such organisations and help the needies. If you need any help on finding the NGO’s in, please comment me, I can help out. Happy reading!!!!
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47 Comments on this post
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Bhaskar said:
Can the same individual be a promoter as well as Director of a Section 25 Company?
February 2nd, 2009 at 9:20 am -
krishnas said:
HI Bhaskar,
Can you post your question in detail?
February 2nd, 2009 at 9:32 am -
saleem said:
I have a clarification on 80g Tax exemption Computation. My Gross total income is Rs. 180000. I have done donations for Rs.30000. How much amount is eligible for tax exemption under 80G. In some forums, it is said that, of the two( 50% of donation and 10% of total income) whichever is lower should be taken as exemption. In some forums, it is said that if the donation exceeds 10% of total income, the donation should be equal to 10% of total income and its 50% (i.e, 50% of 10% of total income) should be taken for exemption. Please clarify which is true?
May 4th, 2009 at 4:49 am -
Krishnas said:
HI Saleem,
In your case you can claim Rs.30000 under the tax deduction. That means you will not pay any tax because your total taxable income is Rs.180000 – Rs.150000 = Rs.30000. The remaining amount will be deducted as the donations to NGO. So, taxable income is nill.
Thanks,
KrishnaMay 5th, 2009 at 1:23 am -
priyaranganathan said:
I have made a donation of Rs.25000 to an NGO last yr (2008-2009) but didnt use it for my tax exemption could i give this to my mom (a retired employee) so that she can avail tax exemption. I have also given an undertaking stating that i havent claimed this amount for any tax exemption.
Regards,
PriyaJune 8th, 2009 at 2:08 am -
mutual health intergrated centre said:
a health ce
June 9th, 2009 at 3:29 am -
krishnas said:
@priyaranganathan,
You have to avail the tax exemption in the same year. Also you can get the tax benefit if you are donated the amount.
Thanks,
KrishnaJune 10th, 2009 at 8:50 am -
mohan patra said:
I want loan for micro-finance institution.
June 12th, 2009 at 3:11 am -
radhika said:
My income is 550000 and i have already saved 100000 and if i donate Rs.30000 to charitable organisation will i be eligible for 130000 deduction. actual deduction is 100000 i want to know how can i get more deduction.
June 30th, 2009 at 9:43 pm -
krishnas said:
HI Radhika,
Yes..you can claim Rs.30000 extra if you are donating to any NGO. What you mention here Rs.100000 is under section 80C. But, you can use other sections like 24b,80G,etc. to save your taxes. If you have more doubts please reply to this comment.
Thanks,
KrishnaJune 30th, 2009 at 11:12 pm -
Ganesh Kumar said:
Hi,
My Yearly CTC is 580000,Already i have claimed 1,00,000 Under 80 C,So if i make donations under 80G for Rs 12,000.How much can i get as tax deduction.Pleas explainThanks,
Ganesh KumarJuly 5th, 2009 at 11:26 pm -
krishnas said:
HI Ganesh,
If you are making the donation to any of the private institution then lowest of the following will be deducted :
i)50% of donation or
ii)10% of your Gross Total Income.In your case the gross total income is Rs.480000(580000-100000).
50% of donation is : 6000
10% of GTI is : 48000Then you are eligible for Rs.6000 deduction from the tax. Hope this clears your doubts.
This link provide more details:
http://www.raagvamdatt.com/Make-donations-save-income-tax-section-80G/207/Thanks,
KrishnaJuly 6th, 2009 at 1:25 am -
Raag Vamdatt said:
Hi Krishna,
Thanks for linking to my website…
July 8th, 2009 at 6:16 am -
krishnas said:
HI Raag,
Your website is more informative. good work!!
Thanks,
KrishnaJuly 8th, 2009 at 6:47 am -
Dr Rajinder Dhar said:
My total incime for the year 2007-08 was 8,99,325.00. I have made donation os Rs. 6490.00. Can I deduct all under 80-G
July 14th, 2009 at 1:34 am -
krishnas said:
Dear Rajinder,
You can deduct Rs.6490 under the section 80G.
Thanks,
KrishnaJuly 14th, 2009 at 5:16 am -
Arvind said:
One Indian NGO gets the Donation of an amount Rs.20 Lacs, under 80G & FCRA, from overseas donor. Then after if donee NGO wish to redonate Rs.5Lacs to another NGO, which possesses 80G & FCRA.Is it lawfull? For doing the redonation Donee NGO have to take the permission from which authority of Government of India?
July 28th, 2009 at 1:11 pm -
ashok kad said:
Sir
my ngo good working in rural area in pune distict in ngo project i want donation RS.1000000 IN 80G
please help me
ashok
09850163214August 16th, 2009 at 2:53 am -
kARUPPASAMY.S said:
dear donors,
we[AWARD]ngo working in hiv/aids fields and drop-out childrens education fields.However we lack funds for further development actions/programmes.But our organisation is eligible to receive public donations under section of 80G.our execmtion up to march 2011.so,we welcome to kind donors for our ngo work support.
if you want any more details please visit our website,www.awardtrust.org
Thankyou
by
karuppasamy
AWARD-ngo-directorAugust 25th, 2009 at 1:30 am -
nauman said:
sir,
i run a ngo in hyderabad named OYSTER- organization by youth for social transformation & environmental recoup.
we are registered under andhra pradesh socities act of 2001,
we are looking for help get ourself registered for tax exemption certificate so that the donors get the exemption under 80G or which ever will be suitable for us.
kindly give us the details.
thanking you
- Nauman ahmedSeptember 12th, 2009 at 7:38 am -
shaju said:
Sir,
A charitable Health organisation working in rural area ( grassroot level)for the benefit of poor people( all section) had applied for 80g excemption for our local contribution. Is it any law objection to get 80g, because our board members are same religious community?
shaju
7 ansari road,
daryaganj,
New delhi.2September 18th, 2009 at 12:10 am -
Sanjay said:
Sir, I want to know that whether there TDS exemption is available for NGO/Non profit organisations or not ? if yes, then what is the process, which form to be used ?
October 1st, 2009 at 1:25 am -
laxmi said:
Hi Sir,
My total income is Rs. 300000 pa. If I donate Rs. 80,000 to a NGO how much expemtion I will get.
Looking forward to hear from you.
Thanks
October 13th, 2009 at 12:50 am -
anand said:
My annual taxable income for the year 2009-10 is Rs. 1717610. I have already saved Rs. 100000 through PF. I have donated Rs. 5000 to education Institution coming under 80 G. I would like to know whether my tax will be reduced by Rs. 2500 or Rs. 2500 will be reduced from my taxable income. There is news that the tax deduction towards education institution is not available for 2009-10. Please reply
October 20th, 2009 at 12:56 am -
BARUN KUMAR SINGH said:
Hi Sir
We are running Voluntary Organisation named is Gandhi Kusth Nivaran Pratisthan. have apply for renewal of 80g in the month of August, 2009 in the state of Bihar till now ihave not get any information from Income Tax Department
With regards,
Barun Kr. Singh
October 26th, 2009 at 3:34 am -
krishnas said:
Hello Barun,
I would suggest you to go and meet the Income Tax officer in person and explain the problem.
Thanks,
KrishnaOctober 26th, 2009 at 6:51 am -
Durgashaker said:
I have heard that recent changes in Income Tax Rules/laws do not require NGOs to renew their 80G exemption. Could you please send me a link where I can read the wordings of the this new rule/law change? Thank you.
November 12th, 2009 at 9:45 am -
krishnas said:
Hello Dugashaker,
Generally, the Income Tax Department issues the registration for a limited period (of 2 years) only. Thereafter, the registration has to be renewed. After the recent budget, NO NEED TO RENEW CERTIFICATE u/s 80G after 1.10.2009. If certificate is granted upto 31.03.2010 which procedure should follow to continue.
Thanks,
KrishnaNovember 12th, 2009 at 5:34 pm -
I.Joseph said:
EDUCATION AND HEALTH PROGRAM
TO HELP THE POOR PEOPLE
November 23rd, 2009 at 2:47 am -
laxmi said:
Hi Sir,
My total income is Rs. 300000 pa. If I donate Rs. 100,000 to a NGO how much expemtion I will get.
Looking forward to hear from you.
Thanks
November 23rd, 2009 at 3:06 am -
krishnas said:
Hello Laxmi,
You can claim Rs.30000 as the exemption. It is the 10% of your total income.
Least of the following:
1. 10% of total income or
2. 50% of the total donation amountThanks,
KrishnaNovember 23rd, 2009 at 3:48 am -
Chittaranjan C. Padave said:
I am a salaired person and looking to take the Tax exemption benefit through 80G. So I donated 10000 to CRY. Post this I am eligible for an exemption of 5000 Rs.
I understand that I will get this Rs.5000 once I file my returns and wait for IT dept to refund it. The time spent by IT Dept to refund the money is quite long and thus wondering is it worth donating money if we are solely looking for tax benefits.I am not selfish but the lethargic but wnat to highlight IT Dept work methodologies which drive away many from donating to NGOs.
December 9th, 2009 at 3:15 am -
p srinivas said:
Sir
my ngo good working in rural area for development of women , orphan and disabled in prakasam distict Andhra pradesh, india in ngo project i want donation RS.5000000 IN 80G
please support to poor people through our organisation.
P.srinivas
09642184078December 16th, 2009 at 6:10 am -
tim said:
Hi…
If any body from U.s.a. or U.k. donate to a religious trust of India which is having Fcra no…. How much tax exemption donor will get…
Can anybody give other detail on such topic also..
Tim…December 21st, 2009 at 3:17 am -
D Jagannath said:
Hello Sir,
We are running a ngo in Bhubaneswar named Asha Alok – for the benefit of mentally retard children ,and for the benefit of children with physical disabled..
we are registered under the public Trust act, on 15.10.2009.
we are looking for help to get ourself registered for tax exemption certificate so that the donors get the exemption under 80G or which ever will be suitable for us.
kindly give us the details.thanking you
D Jagannath
Chairman
Asha Alok
9777127039December 24th, 2009 at 9:14 am -
krishna said:
Hi ,
If i donate the 5000 to the temple will i get any tax exemption. please let me know.January 13th, 2010 at 9:49 pm -
krishnas said:
Hi Krishna,
If the company is registered under section 80G, then only you can claim the exemption.
Thanks,
KrishnaJanuary 15th, 2010 at 4:59 am -
S.Xavier Vijayan said:
Basically I am ex-serviceman. After completion of service from Armed Forces I have involved in the social activities and started a social service institutiion to downtrodden people in the name of errukancherry mother teresa women’s awareness social welfare sangam registered under tamil nadu governement society act 1976. we involved inthe activities awareness on legal anti-sudicidal & anti-dowdry system for womens. Elopping & gender sex awareness generation programmes for schools and collegues going students. Helping the getting Government pensions for widows, old age, destitute women’s and helping the handicapped people by providing them cycles. Also we are involving natural calamities i.e tsuanmi,earthquake,floods & fire etc. We are providng books for chidren education uto 12the standard. We entitled donations from you under 80G income tax act. Now we require financial help from you to run our social institution.
Thanking you sir
January 15th, 2010 at 9:13 am -
tim said:
Hi Krishnas……
Thnks for reply…..
Ya
If any body from U.s.a. or U.k. donate to a religious trust of India which is having Fcra no also registered with 80g… Their normal activities like Raam Roti (Free Food) Goushala, Pure Sanskrit School, ayurvedic medical center etc… All the activities there are running for free, no chargeble.. So I want to know that If a person from here Usa or Uk donate to that trust in dollar or pound …. How much tax exemption donor will get…
Reply…
Thanks …..
Tim……January 18th, 2010 at 8:14 am -
Michael dhas said:
My granny is running a trust .And she had registered the trust under FCRA(Foreign contribution Registration Act) to receive foreign funds but the trust had not yet registered under 80g . Will the trust get Income Tax Exemption on Donations from the local people ?
February 14th, 2010 at 6:26 am -
sucker said:
***k in ass
February 16th, 2010 at 12:11 am -
S.xavier Vijayan said:
Basically I am a Ex-serviceman after completion of my service I have fully involved in the social activities and started a social insitution in the name of ERRUKANCHERRY MOTHER TERESA WOMEN’S AWARENESS SOCIAL WELFARE SANGAM – REGD NO 132/2005. Our Society consists of 300 and above members. We are involved in conducting legal and literacy awareness programme for public,anti-suicidical camps for women’s, Gender sex Awareness,Elopping inisisting moral education among the students in schools and colleges. Health related camps and also involved in the relief of natural calamaties i.e Tsuanami,Flood, Earthquake and Fire accidents etc. Our society have been appreciated by Judges,Police Officers and given merit certificates. Since we are involved in these social activities, we facing problems in continuing the activities because of not having a sufficient equipments, furniture’s, items for conducting the camps, staffs etc in our society.
For this we required financial help of Rs. 200000.00.(Two lakhs only).
For our institution donations are exempted from 80G under income tax NO .2/(957)/07-08 Dated 22.08.2008. Therefore, it is requested that Cheque/Draft may please be made in favour of ERRUKANCHERRY MOTHER TERESA WOMEN’S AWARENESS SOCIAL WELFARE SANGAM, iNDIAN BANK Errukancherry A/C No 708065908. Please do the needful to survive our society.February 16th, 2010 at 5:28 am -
Rutvik makwana said:
we are working with Gandhiyan base ngo in Gujarat. we want to get donetion for our activities u/s 35 ac. { 100% tax diduction} plese contact us. 09426985096/09998863738. or shalaparisar@gmail.com
February 28th, 2010 at 9:58 pm -
Parvesh Kashyap said:
Hello There,
Do you have a list of NGOs / Trusts registered under this section.
March 7th, 2010 at 11:25 pm -
Tejas said:
Hi,
I can give you a Trust Name :
Shree Jagjivanbapu Sevashram – Simradham , Gujarat.
It is registered under 80G.
There activities are : Sanskrit Vidhyalaya, Ram roti, Gaushala, Satsang , Serving to pilgrims & sanyasis, Vedic sacrifices & Ayurvedic Medical Centre.
All the activities running here at free of cost.
It has neither any fixed income of interest nor any name plate of donors like other place.
So good place for donation so take part of this holy attempt by way of donating for the betterment of our future generations.March 7th, 2010 at 11:55 pm -
sri ahobila said:
query:
our sabha’s 80G exemption expires on 31.3.10. should we apply for renewal or is there permanent exemption accorded?March 9th, 2010 at 11:51 pm
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