What are the potential tax benefits of a charitable donation?
The first caveat is that not all charitable donations are tax-deductible. Indian tax laws currently permit deductions only against financial contributions. Material contributions and those of time or skill are not deductible. And `tax-exempt’ does not mean `tax-deductible’. To make sure that your donation is deductible, look for an organisation that is registered under Section 80G of the Income-Tax Act. Section 80GGA of the I-T Act allows a deduction for donations towards scientific research or rural development. This includes “an approved association or institution which has as its object the undertaking of any programme of rural development, to be used for carrying out any programme of rural development or which has as its object the training of persons for implementing programmes of rural development.” Under Section 80G, one can get a 50 per cent deduction on the donation. And under Sections 80GGA and 35AC, for the entire amount donated. The deductions are available for sums up to 1
