When to Claim Deductions of Donations made under section 80G through Employer?
Section 80G (Donate and Save Tax) of the Income Tax act provides for deduction from Taxable income in respect of donation made to funds and charitable institutions. These institutions must have obtained the required approval from Income Tax department.
There are two basic queries which every donor needs to be cleared about in relation to the 80G deduction :
1. Can I claim 80 G deduction through my employer so that it forms part my Form 16 ?
2. What are the important points to be kept in mind while donations to the trusts and institution ?
Is Claiming 80G deduction through employer permissible?
As per clarification provided on Income Tax department website, deduction under Section 80G can be claimed through employer only in case of contribution to the institutions specified.
No deduction should be allowed by the employer/DDO, from the salary income in respect of any donations made for charitable purposes. The tax relief on such donations as admissible u/s 80G will have to be claimed by the taxpayer in the return of income. However, DDOs, on due verification, may allow donations to the following bodies to the extent of 50% of the contribution:
a) The Jawaharlal Nehru Memorial Fund;
b) The Prime Minister’s Drought Relief Fund;
c) The National Children’s Fund;
d) The Indira Gandhi Memorial Trust;
e) The Rajiv Gandhi Foundation,
and to the following bodies to the extent of 100% of the contribution:
1) The National Defence Fund or the Prime Minister’s National Relief Fund;
2) The Prime Minister’s Armenia Earthquake Relief Fund;
3) The Africa (Public Contribution-India) Fund;
4) The National Foundation for Communal Harmony;
5) The Chief Minister’s Earthquake Relief Fund, Maharashtra;
6) The National Blood Transfusion Council;
7) The State Blood Transfusion Council;
8) The Army Central Welfare Fund;
9) The Indian Naval Benevolent Fund;
10) The Air Force Central Welfare Fund;
11) The Andhra Pradesh Chief Minister’s Cyclone Relief Fund, 1996;
(12) The National Illness Assistance Fund;
(13) The Chief Minister’s Relief Fund or Lieutenant Governor’s Relief Fund, in respect of any State or Union Territory, as the case may be, subject to certain conditions;
(14) The University or educational institution of national eminence approved by the prescribed authority;
(15) The National Sports Fund to be set up by the Central Government;
(16) The National Cultural Fund set up by the Central Government;
(17) The Fund for Technology Development and Application set up by the Central Government;
(18) The national trust for welfare of persons with autism, cerebral palsy mental retardation and multiple disabilities.
For donations made to fund/institutions other than mentioned above, you cannot claim the deduction through your employer. You have to claim it while filing your income tax return.
Keeps following in mind while making donations
1. Ensure that the fund /institution is approved by the Income tax department for deduction under this section. For check this, please ask for a photocopy of 80G eligibility certificate from the fund/institution.
2. Always ensure that the Receipt issued by the fund /institution carries the Name and address of the trust, your name, registration number issued to the trust and the validity period of the Registration. Also make sure to tally the the amount written in words and in figures.