Income Tax Act provides several opportunities for taxpayers to claim partial or full deductions. Section 80GGA of Income Tax Act allows 100% deduction on donations made for the country’s scientific research and rural development. The main aim of this Section is to incentivise individuals to donate for noble causes, which can lead to further progress of the nation.
The following donations are eligible for deductions under Section 80GGA of the Income Tax Act:
Here is list of conditions under which one claims deductions under Section 80GGA of the Income Tax Act:
Individuals can claim deductions by mentioning the following in their ITR:
Once the Income Tax Department is fully convinced of the authenticity of donations, it will grant requisite deductions under Section 80GGA.
Section 80GGA does not have any upper limit which restricts donations made to institutions or associations. All donations made under this Section are eligible for a full deduction.
Individuals can make donations in cash, cheque or demand draft as per their convenience. However, cash donations above Rs. 10,000 are excluded from deduction claims. For example, let’s say Mr Jain has an annual taxable income of Rs. 6 lakh. He makes a donation of Rs. 1,00,000 under Section 80GGA. Now, if the total donation is through cheque or demand draft, a 100% deduction will be applicable. However, if the donation is made in cash, then only Rs. 10,000 will be available for deduction.
Section 35AC and Section 80GGA have a similarity between them. These sections allow 100% deductions on donations to specific institutions and organisations. However, 80GGA is only applicable for individuals who do not earn any income from business and profession. On the other hand, individuals having income from business or any profession must claim deductions under Section 35AC.
A crucial difference between these sections is in their carry forward system. One claiming deductions under Section 35AC can carry forward the same to next year in the form of losses. However, one cannot carry forward the deductions claimed under Section 80GGA in the form of losses.
Here is the list of things that one must keep in mind to claim deductions:
The Income Tax Department can disallow deductions on any donation given to non-registered entities.
The main aim of Section 80GGA was to increase philanthropic activities in the country. This Section has helped many NGOs and research institutions carry on their activities. However, individuals wanting to take benefit of this Section must conduct a thorough check on that institution to verify its authenticity before giving donations.
Ans: No, individuals cannot claim deduction under Section 80GG and HRA simultaneously. Section 80GG of the IT Act is applicable to individuals who do not receive HRA as a part of their salary.
Ans: Whenever taxpayers make a donation to some specific charity or fund, they are eligible to claim deductions on the donation amount. They can claim such deductions while filing their ITR. Some donations allow a 100% deduction, whereas some donations allow a 50% deduction.
Ans: All donations that one makes towards Prime Minister’s National Relief Fund and Chief Minister’s Relief Fund do not qualify for deductions under section 80GGA. Only donations for scientific research and rural development are eligible for donations.
Ans: All NGOs and research institutions accepting donations are required to provide a certificate to their donor in Form 58A. This certificate will allow donors to claim tax deductions while filing their Income tax returns.
This article is solely for educational purposes. Navi doesn't take any responsibility for the information or claims made in the blog.
|Section 112A||Section 50||Section 245|
|Section 80QQB||Section 32AD||Section 250|
|Section 35D||Section 143 (1a)||Section 115BAB|
|Section 143||Section 79||Section 140A|
|Section 17(2)||Section 3||Section 94A|
|Section 147||Section 80||Section 40A|
|Section 48||Section 115AD||Section 14A|
|Section 45||Section 285BA||Section 6|
|Section 36||Section 87A||Section 80GGA|
|Section 244A||Section 234E||Section 28|
|Section 197||Sectio 548||Section 194J(1)(ba)|
|Section 145A||Section 80P||Section 92CD|
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