Donation can be claimed as tax deduction under section 80G of IT act. However not all donations are allowed as tax deductions. To claim deductions you must full fill all the conditions that are laid down in section 80G of IT act.
In addition to the terms and conditions of section 80G of IT act we need to look into some other conditions for claiming deduction.
Donations made to foreign trusts are not eligible for tax deductions. For individuals to claim tax deduction under section 80G of IT act, a receipt issued by the trust is required. Such receipt must have following details;
- name of the trust
- address of the trust
- Permanent account number (PAN) of the trust
- Name of the individual who has donated money to the trust
- Amount donated to the trust
- Registration number as issued by the IT department to the trust under section 80G of IT act.
- Validity period of the registration with IT department
Donation to a trust, society or company registered u/s 25 of companies act in India will not qualify for tax deduction unless such trust or society or company has taken approval from IT department. On such approval the IT department will issue a registration number for a period of 2 years. Such registration number and period of validity has to be mentioned in each receipt that is issued on receipt of donations. After completion of 2 years the trust or society or company has to renew their approval with IT department.
If you have donated to a trust or society or company registered under section 25 of companies act and they are not registered with IT department then your donations will not qualify for tax deductions under section 80G of IT act.
Donations in kind like cloths, blankets, food etc are not entitled to any income tax benefits. Donations that are eligible for 100% deductions should issue form 58 to the donor. Form 58 should state the project cost for which they are receiving donations.
Donation below Rs. 10, 000 can be done with a cheques or cash. If you are donating more than or equal to Rs. 10, 000 then such donation has to be done only by cheque to qualify tax deduction.