Investment for tax exemption is crucial for almost every individual, which why the end of the financial year is especially vital for investments pertaining to tax saving. One section of the Income Tax Act, section 80, lists various tax saving possibilities.
SOS Children’s Villages of India is registered under section 80G of the Income Tax Act. On donation, a certificate, along with the receipt, is issued that enables a 50% tax exemption, of the amount contributed, under the concerned section.
Section 80g of Income Tax Act, 1961 allows for deduction to the total taxable income of every individual. The deductions are based upon the contributions you have made towards some charitable organisations or institutions. This is done to promote such voluntary help either in terms of money or kindness towards the needful and reduce the burden of taxpayers who qualify for the deduction creating an environment of positivity while spreading awareness about act of giving to the needful.
Your Benefit Determination
As per the revised tax exemption act, effective April 1, 2017, donations made above thesum amount of Rs500 will be eligible for 50% tax exemption under Section 80G of Income Tax Act. This is calculated as follows:
If “x” is the taxable income per year, and “A” is the amount (where “A”>Rs500) you donated to a charitable organisation which comes under the act.
Then, your new “x1” (after donation) will become:
x1= [x – (A/2)]
For example- If your taxable income per year is Rs10,00,000 and you donate Rs10,000 to charity. Your taxable income per year would be [10,00,000 – (10,000/2)] i.e. [10,00,000 – 5,000] or simply 995,000.
This means you would effectively save 50% of the amount you donate as that would be deducted from annual income tax .
How to avail donation tax exemption u/s 80G
As a donor, to claim 80G tax exemption, you must provide the name and address name of the donor while making the donation. In addition to this, as per the Indian Income Tax Authority Rule, a donor is required to provide PAN number in case the donor wishes to avail the 80G tax exemption certificate.
If the transaction for the donation is made on our website, tax exemption certificate will be processed within six working days and you will receive the same on the email id provided while making the donation.
International eligibility concerns
NRI (Non-Resident Indian) donors, having Indian Citizenship and Indian passport are permitted for tax exemption under section 80 G of the Income Tax Act. Please reach out to email@example.com for any further queries.
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