It is a license issued to NGOs whose donors can claim deduction while calculating their taxable income. If an NGO gets itself registered under section 80G then the person or the organization making a donation to the NGO will get a deduction from his/its taxable income. A Trust or Society or Section 8 Company can apply for license under Section 80G of the Income Tax Act.
To encourage people to donate, the government also allows for income tax deductions under Section 80G for the amount which has been donated. The amount which has been donated by a person is allowed to be claimed as a deduction under Section 80G, at the time of filing his income tax return.
This Deduction for Donation can be claimed by any taxpayer (whether Individual/Partnership Firm/HUF /Company/ LLP etc) irrespective of whether he is earning income from salary or business. The deduction available under Section 80G is over and above the deduction of Rs. 1,50,000 allowed under Section 80C.
An application for provisional registration under Section 80G in Form 10A will be made to Income Tax Department one month before the commencement of activities and the provisional registration is given by the IT department online. The registration once granted shall be valid for three years from the Assessment Year from which the registration is sought.
The provisional registration so granted shall be valid for a period of 3 years and hence needs to be renewed at the end of the above mentioned timelines. The registration so renewed shall be valid only for 5 years and needs to be renewed at the end of each 5 years.
The applicant has to convert this provisional registration earliest of at least 6 months before the expiry or within 6 months of commencement of its activities. The application for conversion of provisional registration to regular registration will be made to Income Tax department in Form 10AB. The regular registration is valid for a period of 5 years from the date of its issuance.
Log on to the E-filing portal of IT department vide https://www.incometaxindiaefiling.gov.in/home
Go to “Income Tax Forms” under e-File tab
Select the Form Name as “Form 10A” and relevant Assessment Year from the drop down list
Select the option of “Prepare and Submit Online” in submission mode
Fill in the details as required in the form and attach the required and applicable attachments
Submit the form using digital signatures or EVC as required while return filing
In some cases, there is no maximum limit for the deduction which can be claimed for donations made under section 80G. However, in some cases deduction on donations under Section 80G is limited to 10% of the Adjusted Gross Total Income of the taxpayer.
The adjusted gross total income of a taxpayer for the purpose of Section 80G is computed as follows:
Particulars | Amount |
Gross Total Income | XXXX |
Less: Long Term Capital Gains | XXX |
Less: Short Term Capital Gains on Sale of Share u/s 111A | XXX |
Less: Deductions under Section 80C to Section 80U | XXX |
= Adjusted Gross Total Income | XXXX |
Less: Deduction under Section 80G* | XXX |
= Total Taxable Income | XXXX |
* Deduction under Section 80G is limited to a maximum of 10% of the Gross Total Income.
The balance income after deductions of donations would be taxable as per the income tax slabs of the taxpayer.
Computation of whether deduction is allowed without any maximum limit or is limited to 10% of the adjusted gross total income depends on the type of institution to whom the amount has been donated. The donations to institutions which are eligible for deduction without any limit and donations to institutions which have a maximum limit for claiming deduction have been mentioned below.
The following donations are allowed to be claimed as a deduction under section 80G. However, in some cases the full deduction is allowed of the amount donated whereas in some cases only 50% of the amount donated can be claimed as a deduction.
Donations eligible for Full Deduction:
Donations eligible for 50% Deduction:
Donations with max limit of 10% of Adjusted Gross Total Income:
The following deductions are allowed subject to a maximum of 10% of the adjusted gross total income. For eg, if your Adjusted Total Income is Rs. 9,00,000 (computed as per method given above), you would be allowed a maximum deduction of only 10% i.e. Rs. 90,000 if donation is made to any of the following.
Donations eligible for full Deduction:
Donations eligible for 50% Deduction:
The following donations are allowed with 50% deduction subject to qualifying amount. Considering the same example as given above, if donation is made to any of the following, you can claim deduction for only donation up to Rs. 90,000. Moreover, the deduction allowed would only be 50% of 90,000 i.e. Rs. 45,000.
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Rambabu Director, Cybervillage Solutions Pvt ltdIt is a license issued to NGOs whose donors can claim deduction while calculating their taxable income. If an NGO gets itself registered under section 80G then the person or the organization making a donation to the NGO will get a deduction from his/its taxable income.
A Trust or Society or Section 8 Company can apply for license under Section 80G of the Income Tax Act.
An application for provisional registration under Section 80G in Form 10A will be made to Income Tax Department one month before the commencement of activities and the provisional registration is given by the IT department online. The registration once granted shall be valid for three years from the Assessment Year from which the registration is sought.
The provisional registration so granted shall be valid for a period of 3 years and hence needs to be renewed at the end of the above mentioned timelines. The registration so renewed shall be valid only for 5 years and needs to be renewed at the end of each 5 years.
The applicant has to convert this provisional registration earliest of at least 6 months before the expiry or within 6 months of commencement of its activities. The application for conversion of provisional registration to regular registration will be made to Income Tax department in Form 10AB. The regular registration is valid for a period of 5 years from the date of its issuance.
Log on to the E-filing portal of IT department vide https://www.incometaxindiaefiling.gov.in/home
Go to “Income Tax Forms” under e-File tab
Select the Form Name as “Form 10A” and relevant Assessment Year from the drop down list
Select the option of “Prepare and Submit Online” in submission mode
Fill in the details as required in the form and attach the required and applicable attachments
Submit the form using digital signatures or EVC as required while return filing
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