What are the Tax Savings on Charitable Donations Online in India

Charity has always been an integral part of the socio-cultural fabric of India. Be it distributing food to the needy on special occasions, or distributing warm clothes to those who do not have the same to sponsoring children or old abandoned parents, most Indian families have had some brush with charitable contributions. 

Taking this a step further the Government of India has tried to give an impetus to charitable giving both by companies and individuals. At the company level, they legalised corporate social responsibility (CSR). Under Section 135 of the Indian Companies Act, it is mandatory for companies to spend a minimum of 2% of their net profit over the preceding three years as CSR. Ay the individual level the government has passed some acts that provide tax savings on charitable donations. These include donations made physically as well as charitable donations online. 

What are the Tax Savings: 

To encourage people to donate to charities the Government of India under section 80G of the Income Tax Act, 1961, provides tax exemptions on donations made to NGOs. In simple term this implies that one can claim a tax deduction on the amount donated to an NGO in India. This in turn has the important points which need to be remembered: 

• This is applicable only to Indian residents or non-Indian residents who have a valid Indian passport. 

• Individuals, companies, firms are all eligible to claim an income tax. 

• The NGO the donation is made to should be recognised and certified under section 80G.

• The amount of tax deduction varies from 50-100% depending on the category of the NGO to which the donation is being made to. 

• The donation can be made by cash, cheque or bank transfers. Donations made in cash that exceed an amount of Rs 2000 are not eligible for the tax exemption. 

• This is a great way of saving some money on ones’ tax while at the same time committing one’s funds to support a cause that helps improve the life of the lesser privileged people in our country. 

There are certain points one needs to remember while supporting an NGO to be able to file for a tax saving at the end f the financial year:

1. One must get a receipt of the amount of the amount donated from the NGO. This holds true for charitable donations online as well. 

2. While submitting the income tax return one has to fill ones, name, address, PAN account number, address, and the amount eligible for deduction. 

3. the tax benefit will depend on the tax rate applicable to the tax payer. 

Charitable giving is an essential part od social responsibility and benefits both the charity and the person donating. By understanding these benefits and making the right choices a donor can maximise their contributions towards society and the same time optimise tax savings on charitable donations. So one can do some good work while availing the schemes available under section 80G of the Indian Income Tax Act. 

If one is looking to donate to an NGO for tax savings on charitable donations, one should look for a cause that one can resonate with. Once that has been determined, one needs to look for a charity that is working in that field. The credibility and authenticity of the charity should be looked at and researched to ensure that funds are being used for the right purpose. 

One such NGO is Genesis Foundation which facilitates the medical treatment of lesser privileged children born with a congenital heart defect. Thus far the Foundation has supported 4500+ children suffering from a critical medical illness across the country. 100% individual donations made to the Foundation are used for the treatment of children with no allocation towards administrative expenses. 

To find out more about them visit the website www.genesis-foundation.net.