Claim Tax Exemption for Donation

Tax Deduction under Section 80G of Income Tax Act for Donation towards Pledge Foundation - (Reg as Pratijnya Foundation)

For charitable contributions made, there is Section 80G, which allows tax savings.

As an incentive for donations, the government has offered a deduction under Section 80G of the Income Tax Act. Every individual, Hindu Undivided Family, Company, and Partnership Firm is entitled to tax benefits under Section 80G. Also applicable to non-resident Indians, it provides a highly attractive tax-saving option along with doing a good deed.

Under the Income Tax Act, in computing the total income of an assessee 50% of “Donation given to any institution or fund covered under sub-clause (iv) of clause (a) of sub-section (2) of Section 80G of Chapter VIA of Income Tax Act i.e. organization like Pledge Foundation (Reg as Pratijnya Foundation) subject to 10% of adjusted gross total income”, shall be deducted.

Adjusted gross total income means gross total income as reduced by any portion thereof on which income tax is not payable under any provision of the Income Tax Act and by any amount in respect of which the assessee is entitled to a deduction under any other provision of Chapter VIA of Income Tax Act.

Mode of payment

When donating through cash, check, draft, or online, taxpayers can claim Section 80G as a deduction. Deduction under Section 80G is available for cash donation* that does not exceed Rs. 2,000. It is, therefore, imperative that checks or donations made online qualify as deductions, aligned with the government’s vision for a cashless economy and transparency.

Section 80G allows a deduction for donations unless they are in the form of a sum of money.

** Please note that Pledge Foundation (Reg as Pratijnya Foundation) does not accept any cash donations.

Procedure for an NGO to qualify for approval under Section 80G of the Income Tax Act

For an NGO to qualify for approval under Section 80G of the Income Tax Act, it needs to fulfill certain criteria. It should be registered under the Societies Registration Act 1860 or under Section 25/8 of the Companies Act 1956/2013 or under the Indian Trusts Act 1882 and it fulfills the conditions mentioned in sub-section (5) of Section 80G of the Income Tax Act.  Pratijnya Foundation is registered under Societies Registration Act and has fulfilled the conditions of sub-section (5) of Section 80G of the Income Tax Act.

Documentation to claim the deduction under Section 80G

As per Clause (viii) and (ix) inserted in sub-section (5) of Section 80G w.e.f. 1.4.2021, requiring institution or fund approved under Section 80G to file a ‘Statement of donation received(in Form No.10BD) having details of donors and donations received’ and also to issue the ‘Certificate to the donor(in Form No.10BE) having details of the donee, details of donor and details of donation received during the financial year’, on or before 31st May immediately following the financial year in which the donation is received.

It has been further stated that deduction on account of the donation under Section 80G shall be allowed to the donor only on the basis of the Statement filed by the donee institution or fund.

So, Pledge Foundation (Reg as Pratijnya Foundation) shall issue the ‘Certificate(in Form No.10BE) under Section 80G to the Donor having details of Pledge Foundation (Reg as Pratijnya Foundation), details of Donor, and details of the donation received during the financial year’ and on the basis of ‘Statement of donation received(in Form No.10BD)’ filed by the Pledge Foundation (Reg as Pratijnya Foundation), details of the Donation will appear in the Income Tax Return of Donor to claim deduction under Section 80G.

Conclusion

Indians are becoming more socially conscious and willing to donate to NGOs. Non-profits like Pledge Foundation have set high benchmarks in ethics, transparency, and ability. It provides a substantial donation tax rebate to donors, as well as the satisfaction of having made a difference. With our well-planned and comprehensive programmes and activities in health, education, hunger, water, and rural development, we impact the lives of the underprivileged. We believe in order to change the lives of children their immediate circle needs to be changed starting from the family itself. Our programmes are designed to make sure that Children are future-ready.

Join us and Change Lives!

Donate