Section 80G of the Income Tax Act enables an Income Tax Payee to claim deduction for donation made by them to certain organization. This deduction is subject to certain conditions.
The amount of deduction depends on–
- To whom the donation has been made.
- The amount of donation. They are exempted from 100% to 50% of the amount of donation.
Charitable organizations/associations such as Society, Trust, etc can apply to the Department of Income Tax for registration under the provision of 80G in a prescribed form. NGO can avail income tax exemption by getting itself registered and complying with certain other formalities, but such registration does not provide any benefit to the persons making donations. The application should be made as early as possible just after the registration of the given organization. For renewal of 80G registration the same form can be used. The Income Tax Act has certain provisions which offer tax benefits to the “donors”. All NGO’s should avail the advantage of these provisions to attract potential donors. Section 80G is one of such sections.
Registration under 80G:
If an NGO gets itself registered under section 80G then the person or the organization making a donation to the NGO will get a deduction of 50% from his/its taxable income. The NGO has to apply in Form No. 10G As per Annexure – 29 to the Commissioner of Income Tax for such registration. Normally this approval is granted for 2-3 years.