Under the existing provisions of section 80G of Income Tax Act 1961, 100% tax deduction is allowed on contribution made to certain funds and institutions formed for a social cause of national importance like National defence fund set up by the Central Government, National Foundation for communal harmony and prime minister national relief fund.
The Finance Minister, Shri Arun Jaitley while presenting the Budget for 2015-16 in Lok Sabha on 28th February 2014, has proposed that donations (other than CSR contributions under the Companies Act 2013) to the Swachh Bharat Kosh (by residents and non residents), Clean Ganga Fund (by residents) and national fund for control of drug abuse will be 100 % deductible under section 80G of the Income-tax Act.
Withi this amendment, tax deduction in case of contribution to Swachh Bharat Kosh and Clean Ganga Fund is eligible from assessment year 2015-2016 and contribution to national fund for control of drugs abuse will be allowed with effect from assessment year 2016-2017.
Swachh Bharat Kosh has been set up by the Modi Government to mobilize resources for better sanitation facility in rural and urban areas and in school presmises through the Swachh Bharat Abhiyan.
Clean Ganga Fund has also been set up by the Modi Government to attract voluntary contribution to rejuvenate river Ganga.
With this amendment to section 80G of Income tax Act 1961, donation made by donor to the swachh bharat kosh and clean ganga fund will be eligible for 100% deduction from assessment year 2015-2016 onwards. This means donors can claim 100% deduction if they have contributed during the financial year 2014-2015 (from 1st of April 2014 to 31st March 2015).
However, any sum spent in pursuance of CSR under Section 135(5) of Companies Act, 2013, will not be eligible for tax deduction under section 80G of Income tax act 1961.
To exempt the income of Swachh Bharat Kosh and Clean Ganga Fund from income-tax, in budget 2015-2016 it has also been proposed to amend section 10 (23C) of the Income Tax Act, 1961.
With this amendment, income received by any person on behalf of the Swachh Bharat Kosh, set up by the Central Government and any income received by any person on behalf of the Clean Ganga Fund, set up by the Central Government will also be exempted from Income Tax.
By emphasizing on improving the quality of life and public health in India through Swachh Bharat initiatives, finance minister has also increased clean energy cess from Rs. 100 to Rs. 200 per metric tonne of coal etc. to finance clean environment initiatives.