Under Section 80G, certain guidelines must be followed to qualify for the maximum allowable tax deduction. Certain gifts are qualified for a deduction of the full one hundred percent, while others are qualified for a deduction of just fifty percent.
In addition to deductions of either 100 or 50 percent, other deductions have restrictions, while some don’t have any limits at all.
After figuring out how much of a tax deduction you are eligible for according to the Income Tax Act, the next step is to decide which charitable trust will receive your contribution. The Income Tax Department will, at various intervals, revise the list of institutions that are eligible for tax breaks and the associated restrictions. Make sure everything on this list is correct before you make your gift.
Donations that have been made may be claimed as tax deductions under one of some primary categories. They are as follows:
- Donations that qualify for a deduction of one hundred percent (there is no upper limit):
These gifts are not subject to any kind of cap of any kind. The National Defense Fund, the National Foundation for Communal Harmony, the Prime Minister’s National Relief Fund, and other similar organizations are examples of funds that qualify for contributions under this category.
- Donations that qualify for a deduction of fifty percent (with no upper limit):
In this category, there is no maximum allowable contribution amount; nonetheless, you are entitled to a deduction equal to fifty percent of the amount of the contribution you make. The Prime Minister’s Drought Relief Fund, the Indira Gandhi Memorial Fund, the National Children’s Fund, and several other funds are among those that have been established.
- Donations that are eligible for a deduction of the full one hundred percent (up to ten percent of the donor’s adjusted gross total income):
After adjusting for exempted income, long-term capital gains, and every deduction from Section 80g deduction through Section 80U (excluding Section 80G), the Gross Total Income is finally determined.
Local governments and the Indian Olympic Association, as well as any other well-established institution in India, can contribute to this category of funds. These organizations, along with any others in India, are tasked with the responsibility of fostering the growth of sports and games in the country.
Donations given to the government or local authority that is used for family planning are likewise admissible under this category and may be used for that purpose.
- Donations that qualify for a deduction of up to 50 percent (up to 10 percent of the donor’s adjusted gross total income):
Donations provided to local authorities or the government, with the expectation that they would utilize the money for charitable purposes, are considered to fall under this category. However, donations made to promote family planning are not considered to fall under this category. Donations provided to repair registered religious buildings, such as temples, gurudwaras, mosques, churches, or any other place of worship, are also considered to fall under this category.
Conclusion
Tax deductions may be obtained quickly and painlessly via the use of section 80g. If, on the other hand, one is interested in acquiring more tax deductions. The health insurance plan satisfies the requirements of Section 80D of the Income Tax Act to be eligible for tax deductions. This insurance plan protects you and your family in times of medical emergencies by offering a host of perks such as a sum assured of up to 50 lakh, coverage for pre and post-hospitalization expenses, and free health check-ups after 3 years, coverage for alternative treatments, and much more.
