You can claim tax deductions under section 80G if you donate to an NGO. Let’s find out how this works.

Who is eligible?

If you are eligible to pay tax, you are automatically qualified to claim a tax deduction under Section 80G. You need to either be a resident Indian or a non-resident Indian(NRI) with an Indian passport. In both cases, you should have a taxable income in India to qualify for an exemption.

Can I donate to any NGO?

Before donating to an NGO, make sure that it is formally registered with the Income Tax Department. This usually needs to be registered under 12A. You can apply for a tax deduction under Section 80G for such an organisation. Apart from this, exemption from tax is also available under Section 80GGA or 35c as per the 1961 Income Tax Act.

List of NGOs:Here are some of the NGOs that you can donate to:

  1. Smile Foundation
  2. Akshaya Patra Foundation
  3. Save the Children
  4. Goonj
  5. Salaam Bombay Foundation
  6. Mahila Dakshata Samiti
  7. Sankara Nethralaya
  8. Senior Citizens Bangalore
  9. Kailash Satyarthi Children’s Foundation
  10. Annamrita Foundation

Things to keep in mind when making a donation

  • If you want to get tax benefits when you are donating to an NGO, remember to make the payment either through cheque, demand draft, online banking, netbanking or through your debit or credit card. Any donations to charitable organisations above the amount of ₹ 2000 should not be made in cash. You will not be avail tax deductions if you donate in the form of cash
  • You will need to get a receipt with the amount that you have donated to the organization with its stamp as proof, for you to avail the tax benefit. Details such as the full name, address and PAN of the NGO should be clearly mentioned along with your name and the amount received from you as a donation.
  • Check if your donation qualifies for a 100% tax deduction. Request the NGO for Form 58 which contains details such as the total project cost, the authorised amount, as well as the funds collected so far by the institution. Without this form, your tax claim stands rejected.

Rules for deduction: As per Section 80G, a part of the amount that you contribute to an NGO qualifies for a tax deduction. The upper limit for this has been set at 10% of your Gross Total Income. Within this too, while donations to some organizations are 100% exempt from tax, while others are 50%.