Tax Exemption

Voluntary donations, whether in cash or kind, to assist those in need is known as charity. Contributing to society not only brings personal satisfaction but also offers the benefit of tax savings.

Shree Parshwanath Seva Sansthan, like many NGOs and non-profit organizations, is dedicated to charitable activities that aid in raising funds and providing support to those in need. Our organization plays a significant role in advancing economic development and social welfare objectives initiated by the Indian government. NGOs use a localized approach to identify the needy and ensure that help reaches them effectively. This is why the Government of India offers tax incentives and exemptions, with Section 80G of the Income Tax Act being one of the most notable.

What is Tax Exemption?

Tax exemption refers to the reduction or elimination of a mandatory payment imposed by the government on individuals or entities. Tax-exempt status can provide relief from various taxes or reduced rates on certain items. Donations to charitable organizations are one example of tax exemptions. Organizations must be registered under Section 12A of the Income Tax Act to qualify for these benefits, but this does not automatically grant approval for deductions under Section 80G.

Exemptions on Donations Under Section 80G of the Income Tax Act

Section 80G of the Income Tax Act provides tax exemptions to donors who contribute to registered NGOs. Donations made to Shree Parshwanath Seva Sansthan are eligible for deductions when calculating the donor's total income. A receipt will be issued to the donor by our organization, allowing them to claim the entitled deduction, provided we are approved under Section 80G. Tax exemptions apply only if the charitable organization operates within India for charitable purposes.

When you donate to Shree Parshwanath Seva Sansthan, you can claim tax exemptions on your contributions. To qualify, we will provide you with the necessary 80G receipts and certificates required by the government.

It's important to note that while Section 12A registration allows for tax-exempt status, it does not automatically permit deductions for donors under Section 80G. Additionally, donations to religious trusts or institutions do not qualify for these deductions.

More About Tax Exemption on Donations Made to Shree Parshwanath Seva Sansthan

While the government allows deductions for donations to charity organizations, the tax exemption under Section 80G may not apply in all cases. Taxpayers, including individuals, firms, companies, Hindu Undivided Families, and Non-Resident Indians (NRIs) with Indian passports and taxable income in India, can claim this benefit.

To claim an exemption under the Income Tax Act, a donor must meet the following criteria:

• The donation must be made to an approved, registered NGO under Section 12A.
• A valid 80G receipt for the donation must be available.
• Donors may need to present a copy of the 80G certificate of the NGO to which they donated.
• Cash donations are limited to ₹2,000; any donation exceeding this amount must be made through other payment methods.
• Donations made in kind do not qualify for tax benefits.

Eligibility for Claiming an Income Tax Exemption Under Section 80G

All taxpayers in India, or those with taxable income in India, are eligible to claim deductions under Section 80G for donations made to qualified charity organizations, subject to government limits. This includes individuals, Hindu Undivided Families, companies, and NRIs who hold Indian passports.

Donations must be made to registered charities that are not religious trusts. Ensure that the organization you donate to is registered under Section 12A to qualify for an 80G certificate.

Documentation Required for Claiming a Section 80G Deduction

To claim a Section 80G deduction, donors must submit the following documents:

• Receipts: A stamped receipt issued by the NGO must be provided, detailing the name, address, and PAN of the trust, the donation amount, and the donor’s name.
• Form 58: This is required for donations eligible for a 100% deduction.
• Registration Number of the Trust: Every registered NGO has a unique registration number issued by the Income Tax Department, which must be included on the donation receipt. This number should be valid as of the donation date.