Tax Relief through Giving: Support NGOs, Save Money

Giving Back to NGOs for Support

NGOs play a vital role in our society and work to promote government policies. These organisations that ensure children, especially those from marginalised communities, have access to better opportunities in life. Often relying on public support, these organisations work to create positive change in society and could use your help to fund their programmes for children’s well-being and development.

Moreover, supporting these worthy causes will also benefit you financially. In India, the government offers tax deductions for charitable donations, allowing you to reduce your tax burden while making a difference. This article delves into Section 80G of the Income Tax Act, explaining how donations translate to tax savings. We will also explore how to choose an NGO to donate and save tax that aligns with your values.

Understanding Tax Relief on Donations in India

Section 80G of the Income Tax Act 1961 provides tax deductions to individuals and entities who donate to certain funds, charitable institutions, and NGOs in India. This section aims to encourage philanthropy and support for social causes by offering financial incentives to donors. Under Section 80G, the donated amount is deducted from the gross total income, reducing the taxable income and tax liability. This deduction is available to all taxpayers, including individuals, companies, firms, and other entities.

Eligibility Criteria for Tax Deductions on Donations

To donate and save tax under Section 80G, certain eligibility criteria must be met:

• Eligible Organisations: Donations must be made to funds or charitable institutions that are recognised and registered under Section 80G. These organisations are typically involved in activities related to education, healthcare, and other social causes.
• Donation Receipt: Donors must obtain a receipt from the organisation receiving the donation. This receipt should include details such as the NGO's name and address, the donor’s name, the amount donated, and the NGO's registration number under Section 80G.
• Modes of Donation: Donations must be made through approved modes of payment such as cheques, drafts, or digital transfers. Cash donations exceeding ₹2,000 are not eligible for tax deductions.
• Percentage of Donation: The deduction varies based on the type of organisation and the nature of the donation. Some donations qualify for a 100% deduction, while others are eligible for a 50% deduction, subject to specified limits.

Understanding these categories helps donors plan their contributions more effectively, ensuring they maximise both their philanthropic impact and their tax savings. By donating to eligible organisations and adhering to the prescribed guidelines, individuals and entities can contribute to societal well-being while enjoying significant tax relief.

Importance of Selecting the Right NGO

Selecting the right NGO to donate and save tax is crucial for ensuring that your contribution makes a meaningful and lasting impact. Here are key factors to consider:

Accreditation and Compliance

It is essential to verify that the NGO is accredited and compliant with relevant regulations, such as Section 80G certification in India, which allows for tax deductions. Compliance with laws and regulations ensures the organisation operates legally and ethically, safeguarding your donation.

Transparency and Accountability

An NGO should be transparent about its operations and finances. Look for organisations that publish detailed annual reports and audited financial statements and have clear governance structures. Transparency helps build trust, ensuring your donation is used responsibly and effectively.

Alignment with Personal Values and Goals

Choosing an NGO that aligns with your personal values and philanthropic goals enhances the satisfaction and meaning of your donation. Whether you make a donation for education, healthcare, or protection, finding an organisation whose mission resonates with your passions ensures your support is directed towards causes you care about deeply.

Conducting thorough research and due diligence is essential when selecting an NGO. By carefully evaluating these factors, you can ensure your donation supports a reputable organisation and contributes to lasting, positive change.

If you are looking to make a donation for education, then consider contributing to Bal Raksha Bharat (also known as Save the Children). This NGO has been working in India for the past 15 years and has impacted the lives of more than 10 million children. Your contribution, no matter how small, will help Save the Children India fund programmes for children’s education, healthcare, nutrition, protection, inclusion, and more. Visit Bal Raksha Bharat’s website and learn more about their effort for children’s welfare in India.

The Way Forward

Donating to NGOs such as Bal Raksha Bharat offers the dual benefits of creating a positive social impact and providing tax savings. When you choose to donate, you are not just helping children in need; you are also investing in society's future. However, to maximise the benefits of your contributions, it is essential to make informed decisions. Conduct thorough research and due diligence to ensure your donation is used effectively and efficiently. Your thoughtful contributions can make a significant difference in the world.