How to claim tax deductions on donations made by individual taxpayers

financialexpress.com:

Question: I am an individual taxpayer and have made certain donations during the year. Kindly guide me on the aspects to be considered for claiming deduction w.r.t. such donations in the Income Tax Return.

Answer by Dr Suresh Surana, Founder, RSM India: Section 80G of the Income Tax Act, 1961 (“the Act”) provides for deductions on account of donations made to various funds, charitable organizations etc. Such specified donations u/s 80G are eligible for deduction up to either 100% or 50%, depending on the nature of the donation and subject to certain conditions.

With regards to claiming such deductions, the taxpayer needs to take into consideration the following aspects:

* Donations made in kind such as food, clothes, medicines, etc. would not qualify for deduction u/s 80G.

* Cash donations exceeding Rs 2,000 would also not qualify for donation u/s 80G.

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* The taxpayer should obtain Certificate of Donations in Form 10BE which contains details of the charitable institution like PAN and Name of such institution, sections under which such donation is available along with details of the donations and donor.

* It is also important for the taxpayers to preserve the proof of such donations made such as donation receipts received from the charitable institution with details such as name and address of institution, donor name, amount and registration number issued by the income tax department.

Such proof of donation may be required to be submitted in case of any potential litigation. Also, the taxpayer is required to furnish such details regarding name, PAN, address of donee and amount in their income tax return.

This Q&A series is published every week on Thursday.

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