Section 80G of the Income Tax Act allows individuals, companies and firms to claim tax deductions on donations made to eligible charitable institutions and funds.
For those who are still looking for ways to save tax for the financial year 2024-25, there is still some time left. However, if you are not sure about the ways to save taxes, here we are going to tell you one.
Section 80G
One way to save taxes is by donating money to eligible charitable organisations. This can be claimed under Section 80G.
What is Section 80G of the Income Tax Act?
Section 80G of the Income Tax Act allows individuals, companies and firms to claim tax deductions on donations made to eligible charitable institutions and funds.
One such eligible trust is the Shri Ram Janmabhoomi Teerth Kshetra Trust. Those who have donated money to this trust or have contributed in cash can qualify for a Section 80G tax deduction. However, there are certain conditions to be eligible for this deduction.
Donations made online and cash contributions up to Rs 2,000 to this trust qualify for a Section 80G tax deduction. That too when a person has opted for the old tax regime.
Also, a tax deduction of up to 50 per cent is allowed when made for housing development, minority community promotion, religious place renovation, etc. This is subject to 10 per cent of adjusted gross total income.
How to claim the deduction under Section 80G
To claim the deduction under this section, you will have to submit the following details in your income tax return:
Name of the donee
PAN of the done
Address of the done
Amount of contribution – the breakup of contribution in cash and another mode
How much will one save?
Let’s consider that a person has a gross total income of Rs 10,00,000 and is eligible for the Rs 1,50,000 deduction under 80C and Rs 3,00,000 under 80E. This person has donated Rs 40,000 to Ayodhya Ram Mandir through online mode. So the gross total income for him would be – Rs 10,00,000 – (Rs 1,50,000 + Rs 3,00,000) = Rs 5,50,000
The 10 per cent qualifying limit in this case is Rs 55,000. As per the rule, one can claim 50 per cent of the donation and therefore, the entire Rs 20,000 is deductible in this case.
