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The Income Tax Act of 1961 allows certain deductions to taxpayers. These deductions are allowed to reduce the tax liabilities of taxpayers. The section 80G of this act addresses such deductions. In this article, we will discuss the deduction under section 80G that can be availed by the taxpayers.
deduction is allowed from the total income of the assessee and tax is
calculated on the net income after deduction. Let us understand both of the
Section 80G tax rebates are allowed to taxpayers for donations made to
charitable organizations. The limit on the amount of deduction depends upon the
organization to which donation is made.
deduction is allowed to encourage donations on the part of taxpayers for the
benefit and development of the society.
section 80G of Income Tax Act 1961 serves dual benefits for society. Primarily
it reduces the tax liability of the taxpayers and provides them with a chance
to invest that money in charitable and social development cases.
the other hand, it acts as a pillar for activities carried out for social
development. Donations from taxpayers create a large fund for social
to such donation, these organisations can carry their work of social
The limit of deduction allowed to taxpayers under this section is basically divided into 4 categories as under:
deduction is allowed against a donation made to specific government-specified
charitable organizations. One can avail the whole amount as a rebate, which has
been paid as a donation.
of the government specified charitable organizations are as under:
made to the following organizations will qualify for 100% deduction subject to
a specific limit:
Donation made to the following organizations will qualify for a deduction of 50% of the total amount without any maximum limit:
Donation made to the following organizations will qualify for a 50% deduction subject to a maximum limit:
items should be deducted from total income to calculate Gross Total Income:
The following assesses are eligible to avail deduction under section 80G
in certain cases only companies are eligible.
In order to avail deduction under section 80G, the donation has to be made in cash and not in kind. Donation in kind does not qualify for deductions.
the mode of payment should be either through cheque, demand draft or cash.
However, if cash is paid, then a maximum limit is imposed on the amount that
can be paid through cash.
Every deduction under section 80G not only reduces the tax burden of taxpayers but also play a significant role in the development of society.
donation is helpful to achieve common goals of development of society and
However, one should be very cautious at the time of filing for such deductions. Giving wrong information can attract a penalty for the taxpayer.
Akash Dubey is a Law Graduate and works as an
Advisor at Enterslice. He is proficient in Legal
and Financial Advisory. His expertise in the
skills of Legal and Financial Research is an aid
to his strengths as an Advisor.
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