Donation Tax Exemption: Save Taxes by Donating

If you have bought insurance or have taken full advantage of tax exemption under 80C, donation tax exemption is something you need to be aware of. You are not only saving your taxes here but you are also doing something good for others.

Under the 80G section of the IT Act, you can make donations to some specified institutions or relief funds which will be deducted from the total taxable income. But you need to not claim the deduction on every entity. Moreover, you will be able to claim deduction only on the donations mentioned in the specific list.

Who Can Get Donation Tax Exemption?

There is no restriction on the category you use to donate to, you can get the donation tax exemption by donating to any registered institutions or the relief funds that the government sets up. You must also know that if you have donated any foreign funds, they will not be exempted or deducted. Moreover, donations made to the political parties can be claimed.

Payment Methods

So, Donation tax exemption can only be claimed if you have made the payment to the institution via cash or cheque. If a person makes a payment in cash, he can avail a reduction of 2000 rs. But there is no limit on the reduction amount that you can avail when you will pay via cheque or any other digital payment platform.

What Documents are Required for Donation Tax Exemption?

You will have to submit the standard receipt provided to you by the institution as donation proof. On the donation proof, you will have to check if it has the name, pan card number, address, correct signature, and amount properly written. You will need all these details to file an ITR at the end of the year. These things are mandatory in the slip so make sure to check them before taking the receipt.

Conclusion

Donating will not only help you to save tax but it will help others to have a good meal a day or study in a good school. So, do good to others and save your taxes as well.

Do you want to know more about Donation tax exemption? Visit us at https://www.savethechildren.in.