Tax Benefits

Indian Citizens

What are tax benefits for the donations made through iCharity?

All donations made through iCharity are eligible for tax-deduction as follows;

  • 50% deduction under section 80G of Indian Income-tax Act, 1961 (or)
  • 100% deduction under section 35AC of Indian Income-tax Act (only for specific projects e.g. Prime Ministers National Relief fund)

E.g. The 50% deduction means, if your taxable income for the FY 2012-13 is Rs. 300,000 and you have made a donation of Rs 20,000 in the same year; your net taxable income will be Rs. 290,000 and accordingly your final tax will be calculated.

You should also note that donation in cash is only eligible for tax deductions. Any donations made in-kind such as clothes, food, stationery etc. are not eligible for tax deduction.

How to claim the tax exemptions?

Tax benefits on the donations can be availed at the time of filing Income-tax returns for the financial year.

What are the documents required for claiming tax benefits?

iCharity will send the scanned copy of the 80G certificate within 3-5 days after your donation is confirmed. You may use certificate as a proof of donation while filing the returns.

Are donations made through payroll eligible for TDS?

No, clause 5.4(19) G of CBDT circular 1/2010 dated 11/01/2010 states that while deducting TDS from the salary ,the employer need not consider 80G payment of the employee. However, the employee can claim the tax benefit of the donation in his income tax returns separately. Please note that the donations should have been made in the same year in which the deduction is sought.

Is there any limit for tax exemption on donations?

If the aggregate of sums donated is more than 10% of the adjusted gross income, the excess amount ceases to be entitled for tax benefit.