During the financial year an employee may have donated certain amount out of his salary to a trust or any other institutions for charity. As per IT act such donation can be claimed as IT deduction only if it is donated to a trust or institutions which are approved by IT department to receive donation under section 80G of IT act.
Now the question is how to claim IT deduction u/s 80G. Certain deductions can be claimed by submitting proof of donations to your employer and in some other cases donations can only be claimed by the individual while filling IT return.
Deduction through employer
Following donations can be claimed as an IT deduction by submitting the proof of donation to employer if such donations are paid through your employer;
- Prime minister national relief fund
- Chief minister relief fund
- lieutenant governor’s relief fund
In cases where employees are contributing to these funds through their employer, it is not possible for such funds to issue separate certificate to each employees who has contributed to such funds as contributions are in the form of a consolidated cheque. All employees who have donated to such fund can claim IT deductions under section 80G of IT act through their employer. Such donations will be part of form 16 on the basis of which employee can file their IT return. Certificate issued by your employer will be considered as proof of donations.
Deductions through tax return
Employees donated on their own can not claim tax benefit by submitting the donation receipt to their employer.
To claim such deductions you need to mention it while filling IT return. You need not submit the receipt or any other proof for your donations along with your IT return. You need to retain the proof of your donation as it will be required if assessing officer asked for such proof.
Other relevant points to claim deduction U/S 80G
- Donations above Rs. 10, 000 should be paid through a cheque. If it is paid in cash then such amount cannot be claimed as tax deduction under section 80G of IT act.
- Before donating please ensure that the fund or institution is approved by IT department to claim deduction under section 80G of IT act. You can verify it from 80G certificate that is issued by IT department to the fund or institution.
- The receipt should contain
- Name and address of the trust
- PAN of the trust or institution
- Your name
- Registration number
- Validity period of registration
- No maximum or minimum amount is specified under section 80G but deductions in certain cases are limited to 10% of the gross total income.
A self employed person in all cases can claim tax deductions while filling his IT return. They need not attach donation proof while filling their IT return. However such proof has to be produced before the assessing officer if it is asked for.
Recommended Read: Detail provision of Section 80G of IT act.