DEDUCTION IN RESPECT OF DONATIONS OTHER THAN POLITICAL PARTIES UNDER SECTION 80G:-  Deduction of donations is allowed to any assessee under Indian Income Tax Act who has made donation to the notified institutions or associations. Donation is divided in two parts for the purpose of claiming the amount of donation from taxable income of assessee as under:-

100% deduction is allowed in respect of donation made in certain cases. Few names are given as under:-

  1. Prime Minister’s Relief Fund.
  2. National Defence Fund.
  3. Armenia Earthquake Relief Fund.
  4. Africa (Public Contribution – India Fund.
  5. National Children Fund.
  6. National Foundation for Communal Harmony.
  7. An Approved University or Educational Institution of National Eminence.
  8. Chief Ministers Earthquake Relief Fund, Maharashtra.
  9. Any fund set up by the Government of Gujrat exclusively for providing relief to earthquake victims.
  10. The National Blood Transfusion Council or any State Blood Transfusion Council
  11. The Andhra Pradesh Chief Minister’s Cyclone Relief Fund, 1996.
  12. The National Illness Assistance Fund.
  13. The Chief Minister’s Relief Fund of any State or Union Territory.
  14. Lieutenant Governor’s Fund of any State of Union Territory.
  15. The National Sports Fund.
  16. The National Cultural Fund.
  17. The Fund for Technology Development and Application.
  18. The National Trust for Welfare of Person With Autism, Cerebral Palsy, Mental Retardation and multiple divisibility
  19. Swachh Bharat Kosh (With effect from F.Y. 01.04.14)
  20. Clean Ganga Fund (With effect from F.Y. 01.04.14)
  21. The National Fund for Control of Drug Abuse.(With effect from F.Y. 01.04.15)
  22. The Government or any Approved Local Authority, Institution or association for promoting family planning.
  23. Indian Olympic Association or any other notified association/institution for development of infrastructure or sponsorship of sports and games in India (Donation by a company)
  24. Zila Saksharta Samiti constituted for improvement of primary education and literacy in villages and towns.
  25. Any State Government Fund providing medical relief to the poor.
  26. Army Central Welfare Fund.
  27. Indian Naval Benevolent Fund.
  28. Air Force Central Welfare Fund.
  29. Any other institutions which are notified by Government from time to time.

 50% deduction is allowed in respect of donation made in certain cases. Few names are given as under:-

  • Jawahar Lal Nehru Memorial Fund.
  • Prime Minister’s Drought Relief Fund.
  • Rajiv Gandhi Foundation Fund.
  • Indira Gandhi Memorial Trust.
  • Any fund or institution established in India for a Charitable purpose which incurs expenditures, maximum 5% of its income, for a religious purpose. U/S 80G (5B)
  • Any Government or Local Authority for charitable purposes other than promotion of family planning.
  • An Authority for town planning and housing etc.
  • Any charitable institute established in India for Charitable purpose under section 80G(5B).
  • Any corporation established by the Central/State Government for promoting the interest of the members of a minority community.
  • Any temple, mosque, gurdwara, church or other place of worship which is of historic, archaeological or artistic importance.
  • Donations during 26.01.01 to 30.09.01 for providing relief to earthquake victims in Gujrat, to any trust, institution or fund established for a charitable purpose u/s 80G(5C)
  • Any other institutions which are notified by Government from time to time

CONDITIONS TO AVAIL THE DEDUCTIONS FOR DONATION MADE

  1. There are certain donations (100% or 50%) which are allowed with out any limit but there are some donations (100% or 50%)  must not exceed 10% of gross total income of assessee.
  2. Gross total income for this purpose will be reduced by
    • deductions allowed under section 80C to 80U except 80G,
    • tax free income
    • long term capital gain
    • short term capital gains taxable special rate under section 111A.
  3. Any donation exceeding Rs.10000/=, made in cash, shall not be allowed for deduction. With effect from financial year 2017-18 limit of case payment of donation is reduced to Rs.2000/=

Illustration:-

Mr. X (52 years old) has the following details in F.Y. 2016-17 as under:-

  • Income from interest from fix deposits with bank RS.260000/=
  • Income from interest from Public Provident Fund Rs.120000/=
  • Long Term Capital Gain from Mutual Funds Rs.15000/=
  • Income From Business Rs.150000/=
  • He deposited in Public Provident Fund Rs.50000/=during current financial year.
  • Dividend received from Mutual Funds Rs.25000/=
  • He donated to National Defence Fund Rs.10000/= (100% deduction allowed)

Calculate the amount of deduction to be claimed by Mr. X in financial year 2016-17 ?

Solution:-

Income from interest on fix deposits      Rs.260000/=

Income from business                           Rs. 150000/=

Gross Taxable Income                           Rs.410000/=

Less: Deduction under 80C

(Deposit in PPF account                           Rs.50000/=

Taxable Income                                        Rs.360000/=

(Before deduction of donation)

Less: Donation to National Defence –

Fund (100% deduction) u/s 80G                   Rs.10000/=

Net Taxable Income                                  Rs.350000/=

Notes:- Income from interest of PPF, Long Term Capital Gain on Mutual Funds and Dividend from Mutual Funds are tax free. Therefore these incomes are not considered for calculation of gross taxable income for the purpose of allowable deductions of donation.

The condition of 10% of gross total income of Mr. X  does not apply in this case since 100% deduction will be allowed for donation made in respect of National Defence Fund .

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