Income Tax exemption for donors to social organisations
Querist :
Anonymous
(Querist) 28 April 2011
This query is : Resolved
Dear Experts if a social organisation wants that its donors get income tax exemption benefit on the amount of money they are donating, what needs to be done by the social organisation.
R.Ramachandran
(Expert) 28 April 2011
You have to approach the Commissioner of Income tax under whose jurisdiction your organization falls, make an application giving various details that may be asked by the Department, including the Registration particulars, the objects and aims of the organization and other particulars. If satisfied, the CIT will grant you the necessary certificate.
Guest
(Expert) 29 April 2011
Pl follow the advice of Mr. Ramachandran.
A V Vishal
(Expert) 29 April 2011
If the organisation is registered under the Section 80g, the person or company making donations to such organisations are eligible to claim the Tax Exemption on the amount they donated. But, there is certain restrictions on how much can exempted from the whole donations are subject to the Income Tax rules under Section 80g. Please read the following sections to learn more about the details.
Conditions on Section 80g
There is few conditions to be fulfilled under the Section 80g.
The NGO should not have any income which are not exempted, such as business income. If, the NGO has business income then it should maintain separate books of accounts and should not divert donations received for the purpose of such business.
The bylaws or objectives of the NGOs should not contain any provision for spending the income or assets of the NGO for purposes other than charitable.
The NGO is not working for the benefit of particular religious community or caste.
The NGO maintains regular accounts of its receipts & expenditures.
The NGO is properly registered under the Societies Registration Act 1860 or under any law corresponding to that act or is registered under section 25 of the Companies Act 1956.
Tax Exemption Limit on Donations
There is a limit on how much money can be exempted from the Income Tax.
If the amount of deduction to a charitable organisation or trust is more than 10% of the Gross Total Income computed under the Act (as reduced by income on which income-tax is not payable under any provision of this Act and by any amount in respect of which the assessee is entitled to a deduction under any other provision of this Chapter), then the amount in excess of 10% of Gross Total Income shall not qualify for deduction under section 80G.
The persons or organisation who donate under section 80G gets a deduction of 50% from their taxable income. Here at times a confusion creeps in, that the tax advantage under section 80G is 50%, but actually it is not so. 50% of the donation made is allowed to be deducted from the taxable income and consequently tax is calculated. The ultimate benefit will depend on the tax rates applicable to the assessee.
MUKESH SHARMA
(Expert) 15 May 2011
you will have to take permissions from commissioner of income tax
