Many individuals consider contributing to charitable causes as a means of contributing to society. Recognising the altruistic nature of such gestures, the government offers robust support for charitable initiatives and facilitates tax deductions on donated amounts. Section 80G of the Indian Income Tax Act specifically allows for tax deductions on contributions made to specified relief funds and charitable institutions. This provision enables individuals to claim deductions under Section 80G in addition to those available under Section 80C, providing an avenue to optimise tax savings while actively participating in philanthropy. By leveraging Section 80G, individuals can make a positive impact on both society and their financial planning, fostering a spirit of giving while enjoying associated tax benefits.
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Recent Updates from Budget 2023
The donations made to the specified funds are no longer eligible for deductions under Section 80G as per the provisions outlined in the Budget for 2023.
National Defense Fund
Prime Minister’s National Relief Fund
The National Foundation for Communal Harmony
National/State Blood Transfusion Council
Donations which are eligible for 50% deduction without any qualifying limit:
Jawaharlal Nehru Memorial Fund
Rajiv Gandhi Foundation
Indira Gandhi Memorial Trust
Prime Minister's Drought Relief Fund
What is a deduction under Chapter VI of the Income Tax Act?
Deductions under Chapter VI of the Income Tax Act pertain to various sections that allow taxpayers to reduce their taxable income, thereby lowering their overall tax liability. These deductions are designed to encourage specific activities or investments that contribute to the individual's well-being or the overall economic development.
Who is Eligible for deduction under section 80G
The eligibility for deduction under Section 80G includes
Hindu Undivided Firm (HUF)
Non-Resident Indian (NRI)
Any other person
Notably, not all contributions are eligible for deductions under Section 80G. Only donations through prescribed modes qualify for this deduction.
Note: Deduction is only for Taxpayer opting for Old Tax Regime