income tax--80 G donation

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

15 May 2010 whether there is any minimum limit for
claiming deduction under section 801 G?
i.e minimum amount of donation to be given in order to cliam deduction i.e above 5000 or 2500 ?

Rahul Gupta

Rahul Gupta (Expert)
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15 May 2010 No there is no minimum limit for claiming deduction u/s 80-G for Donations made.

CA. BIJENDER KR. BANSAL

CA. BIJENDER KR. BANSAL (Expert)
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15 May 2010 Yes there is limit for payment (upto 10% of Adjusted Gross total Income) and for claiming also as per nature of trust to whom dontaion you have paid.

Please read the below article for details.
INSPITE of all the contributions made to social causes, there is a huge gap between the demand of money from the needy and the amount donated by philanthropists. This probably, is the reason why the Government has given tax benefits on donations. The amount donated towards charity attracts deduction under section 80G of the Income Tax Act, 1961. Section 80G has been in the law book since financial year 1967-68 and it seems it’s here to stay. Several deductions have been swept away but the tax sop for donations appears to have survived the axe. The main features of tax benefit with respect to charity are as follows:
Allowable to all kind of Assessee:- Any person or ‘assessee’ who makes an eligible donation is entitled to get tax deductions subject to conditions. This section does not restrict the deduction to individuals, companies or any specific category of taxpayer.
Donation to Foreign Trust:- Donations made to foreign trusts do not qualify for deduction under this section.
Donation to Political Parties:- You cannot claim deduction for donations made to political parties for any reason, including paying for brochures, souvenirs or pamphlets brought out by such parties.
Only donation made to made to prescribed funds and institutions qualify for deduction: - All donations are not eligible for tax benefits. Tax benefits can be claimed only on specific donations i.e. those made to prescribed funds and institutions.
Maximum allowable deduction:- If aggregate of the sums donated exceed 10% of the adjusted gross total income, the amount in excess of 10% ceases to be entitled for tax benefit.
Documentation Required for Claiming deduction U/s. 80G
• Stamped receipt: For claiming deduction under Section 80G, a receipt issued by the recipient trust is a must. The receipt must contain the name and address of the Trust, the name of the donor, the amount donated (please ensure that the amount written in words and figures tally).
• Mention of Registration No. of the Trust Under 80G on receipt:- The most important requirement is the Registration number issued by the Income Tax Department under Section 80G. This number must be printed on the receipt. Generally, the Income Tax Department issues the registration for a limited period (of 2 years) only. Thereafter, the registration has to be renewed. The receipt must not only mention the Registration number but also the validity period of the registration.
• Validity of Registration U/s. 80G on the date of Donation:- The donor must ensure that the registration is valid on the date on which the donation is given. For example, the registration of a trust may be valid from April 1, 2007 to March 31, 2009. Now, if the trust does not get its registration renewed on or after April 1, 2009 then even if donation receipt is issued by the trust to the donor for donations received on or after April 1, 2009, the donor would not get any tax benefit.
• Photocopy of the 80G certificate :- Check the validity period of the 80G certificate. Always insist on a photocopy of the 80G certificate in addition to the receipt.
Only donations in cash/cheque are eligible for the tax deduction:-Donations in kind do not entitle for any tax benefits. For example, during natural disasters such as floods, earthquake, and many organisations start campaigns for collecting clothes, blankets, food etc. Such donations will not fetch you any tax benefits.
Donation made by NRI: - NRIs are also entitled to claim tax benefits against donations, subject to the donations being made to eligible institutions and funds.
Deduction if donation deducted from Salary and donation receipt certificate is on the name of employer:- Employees can claim deduction u/s 80G provided a certificate from the Employer is received in which employer states the fact that The Contribution was made out from employee’s salary account.
Limit on donation amount: -There is no upper limit on the amount of donation. However in some cases there is a cap on the eligible amount i.e. a maximum of 10% of the gross total income.
Deduction amount U/s. 80G:- Donations paid to specified institutions qualify for tax deduction under section 80G but is subject to certain ceiling limits. Based on limits, we can broadly divide all eligible donations under section 80G into four categories:
a) 100% deduction without any qualifying limit (e.g., Prime Minister’s National Relief Fund).
b) 50% deduction without any qualifying limit (e.g., Indira Gandhi Memorial Trust).
c) 100% deduction subject to qualifying limit (e.g., an approved institution for promoting family planning).
d) 50% deduction subject to qualifying limit (e.g., an approved institution for charitable purpose other than promoting family planning).
For list of Institution donation to whom is eligible to 100% deduction without any qualifying limit, eligible to 50% deduction without any qualifying limit, 100% & Subject to qualifying limit and of those eligible for 50% deduction subject to qualifying limit please check the link given below:-
http://www.incometaxindia.gov.in/Acts/INCOME%20TAX%20Act/80g.asp
Qualifying Limit:- The qualifying limits u/s 80G is 10% of the adjusted gross total income. The limit is to be applied to the adjusted gross total income. The ‘adjusted gross total income’ for this purpose is the gross total income (i.e. the sub total of income under various heads) reduced by the following:
• Amount deductible under Sections 80CCC to 80U (but not Section 80G)
• Exempt income
• Long-term capital gains
• Income referred to in Sections 115A, 115AB, 115AC, 115AD and 115D, relating to non-residents and foreign companies.
Eligible Donation:- There are thousands of trusts registered in India that claim to be engaged in charitable activities. Many of them are genuine but some are untrue. In order that only genuine trusts get the tax benefits, the Government has made it compulsory for all charitable trusts to register themselves with the Income Tax Department. And for this purpose the Government has made two types of registrations necessary u/s. 12A & U/s. 80G. Only if the trust follows the registration U/s. 12A, they will get the tax exemption certificate, which is popularly known as 80G certificate. The government periodically releases a list of approved charitable institutions and funds that are eligible to receive donations that qualify for deduction. The list includes trusts, societies and corporate bodies incorporated under Section 25 of the Companies Act 1956 as non-profit companies.

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CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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15 May 2010 DEAR BANSAL JI YOU ARE CORRECT BUT RAHUL IS ALSO CORRECT IN HIS REPLY AS THE QUESTION IS WHETHER THERE IS ANY MINIMUM LIMIT. AS PER HIS ANSWER THERE IS NO MINIMUM LIMIT WHICH IS CORRECT. BUT THANKS FOR GIVING US ALL THE DETAILS.

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Rahul Gupta

Rahul Gupta (Expert)
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15 May 2010 Agreed with Mr. Sanjay. Thnaks Mr. sanjay for the clarification.
Thanks Mr. Bansal for the information.

For Mr. Author of the Query, there is no Minimum Limit for deduction u/s 80G. However, in case of maximum limit, please go through the information provided by Mr. Bansal.

Regards

CA. BIJENDER KR. BANSAL

CA. BIJENDER KR. BANSAL (Expert)
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17 May 2010 THANKS MR. SANJAY JI AND RAHUL JI FOR GIVING FEEDBACK. IN HURRY , I HAVE NOT READ MINIMUM OR MAX.

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CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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17 May 2010 IT HAPPENS SIR...HAPPENS TO ALL OF US...
BUT MORE IMPORTANTLY WE ARE ALL HERE TO SHARE OUR KNOWLEDGE AND HELP EACH OTHER.