80G is a certificate that provides tax exemptions to individuals who make donations to registered charitable trusts, section 8 companies, or eligible organizations. It was introduced in the year 1967-68 and is an important means of saving taxes.
Who can benefit from tax savings under 80G?
- Individuals who make eligible donations can avail tax exemptions under 80G.
- Donations made to listed trusts and organizations qualify for deductions under section 80G.
Who cannot benefit from tax savings under section 80G?
- Donations made to foreign trusts do not qualify for tax savings under section 80G.
- Donations to political parties are not eligible for deductions.
- Expenses related to printing or publishing of brochures, flyers, and pamphlets cannot be claimed for deductions.
Percentage of Deduction under Section 80G:
- Donations to the Prime Minister’s Relief Fund are eligible for 100% deduction without any limit.
- Donations to trusts like the “Indira Gandhi Memorial Trust” qualify for 50% deduction without any limit.
- Institutions promoting family planning are eligible for 100% exemption under section 80G.
- Charitable trusts on the approved list are eligible for 50% deduction under section 80G.
Mode of Payments Eligible for Tax Deduction:
- Only cash or cheque donations qualify for tax exemption.
- Donations made in the form of gifts or in-kind during a disaster do not provide tax benefits.
- Deductions from salary require a donation receipt issued in the name of the employer to claim exemptions under section 80G.
The applicant or recipient of the 80G registration must comply with the requirements specified below:
- Only public charitable trusts, registered societies, recognized educational institutions, or institutions funded by the Government are eligible to apply for the 80G registration.
- The trust or institution seeking the certificate must be legally registered under the Societies Registration Act, 1860; or Section 25 of the Companies Act; or any other relevant Acts.
- Applicants for the certificate must not engage in activities based on religion, caste, or creed.
- The trust or institution must utilize the donated funds exclusively for charitable purposes.
- The registered trust or institution should not possess any income that is not exempted.
- Entities involved in other businesses must maintain separate accounts to ensure clear segregation of donated funds from other savings.
- The applicant must have maintained appropriate annual returns, accounting records, and bookkeeping before applying for the certificate.
- The recipient of the certificate must ensure timely renewal of certificates to continue receiving eligible tax benefits.
Registration under this section will be processed by the Commissioner of Income Tax after receiving an application from the applicant in Form 10G. The application should be accompanied by the following documents:
- Registration Certificate
- MOA /Trust Deed
- NOC from the proprietor of the land where the registered office is situated.
- Copy of the Pan Card of the Trust/Institution.
- Copy of electricity bill, house tax receipt, or water bill
- Proof of welfare activities pursued
- Progress Report since the foundation of the NGO or for the previous 3 years
- The statement of accounts and balance sheet since the foundation/previous 3 years
- List of contributors along with their address and PAN.
- List of governing body of trustees with their contact details
- Copy of registration granted under section 12A or copy of notification issued under section 10(23)or section 10(23C)
Key Deliverables
a. Certificate of 80G registration