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Donating for tax exemption – Will it help the society?

Donate and save tax

Hunger, malnutrition, poverty, illiteracy, unemployment, child labour, homelessness, water scarcity, climate change, pollution, a threat to marine ecology, animal rights, natural disaster, and the list go on. These and more such issues are being battled nationally and globally by almost every nation. Hence, not just governmental intervention, but it requires the involvement of all – communities, corporates, and individual citizens for a society to thrive coherently. Undoubtedly, the government is responsible for the growth and development of the country and its citizens. But, it is also our responsibility to do our bit in countering various socio-environmental issues. And, one of the effective ways is to get involved with a Non-Governmental Organisation (NGO). Yes, NGOs are legally formed active groups working towards various issues in a focussed and strategized manner, and most importantly, for the sustainability of the society from the grass root level. Though independent of any government management and ownership, NGOs play a significant role in creating a synergy between all the sectors and communities of the society towards fighting for a cause.

Your involvement with an NGO gives you the opportunity to contribute constructively towards the betterment of the society. Comprehending the potential of NGOs, the Government of India introduced Section 80G as tax exemption in India to encourage people to donate towards charitable trusts by providing income tax relief. Under Section 80G of the Income Tax Act, the amount donated towards an NGO is allowed to be claimed as a deduction at the time of filing income tax return, provided the charitable trust or relief fund you have donated to is registered to offer you exemptions from taxes. The assessee can either claim income tax exemption of 100% or 50% of the amount donated as a deduction depending upon the criterions set by the Income Tax Act.

Over the years, there has been a visible change in the number of individuals who donate towards charity. According to the World Giving Index 2016, about 203 million Indians donated money during 2015 as opposed to 183 million in 2014. Simultaneously, there has also been an increase in the awareness of various issues. In addition, the government is also taking steps to ensure transparency and accountability of the funds received by the NGOs, thereby furthering the confidence of donors on charitable trusts.

Financial contributions play a crucial role in the operations of an NGO. And that’s why NGOs respect every penny of your donation and maximise its potential towards achieving their goals pertaining to their respective causes. For example, if you donate towards PETA, you are ensuring animal rights; if you are donating towards Save Green, you are helping to increase green cover and the like. Similarly, when you donate to Akshaya Patra, you are contributing towards school lunch for children in government and government-aided schools. This means while you are supporting a cause you are also saving tax under 80G deduction.

As they say, ‘change does not happen overnight’, it takes a lot of perseverance, commitment, and dedication. Hence, only with a continuous concerted effort from all of us can bring about the change we want to see. For example: when you donate towards the Mid-Day Meal Programme, you are supporting children to continue schooling by countering hunger. This will create a nourished and educated generation who will be assets for their families in particular and the nation in general. So, while you support the healthy development of children, you are also receiving income tax exemption.

Well then, wouldn’t it be a good idea to invest in a noble cause while you also save tax? Go ahead, be the change-maker. Choose to donate and save tax.

2 Comments

  1. Very well narrated… A very informative thread for any citizen who falls into the mighty jaws of taxation system & finds it difficult to understand how to save tax upto 100 percent slab by the IT act. When its also supporting a noble cause such as this, it sweeter.
    I’m sure not much people know about the way NGO donations works in favour of the cause and at the same time favours their own savings..

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