Written by : DG Gupta

A financial professional, qualified Chartered Accountants and Company Secretary examinations and enriched with experience of all types of accounting, taxation and compliance of Manufacturing as well as Service Industries

How to save Income Tax in India by Donating?

DG Gupta
DG Gupta, CA, CS

Jan 24, 2021 09:43

1. Is your income close to INR 5 Lacs and you paying taxes?

2. Have you made any donation this financial year or planning for donation?

If answer to any of above question is affirmative, this article is useful for you to save taxes….

In India Income Tax, there is discount in taxes when someone pays some donation to charitable organization. and this discounts, sometimes 100% to the donation amount from the taxable income and some times it is 50% of the donation from taxable income. moreover some times limit of 10% of gross total income to apply for donation.

So if you have made any donation in the financial year, you are requested to take proper receipts from the donee organization to avail tax benefit under income tax act.

Moreover if your taxable income is close to INR 5 Lacs, please have a look on below prepositions:

Case: To compute Income Taxes in India for a resident below 60 years

Gross Total Income - INR 655,000, Investment 80C/CCD - 150000

Tax Liability, if no donation - 14040

Tax Liability if Donation 5000 - NIL

Outflow saved by Donation INR 5000 >>>>>>>>> INR 9040

As detailed in above case, if one having gross total income in AY 2021–22 of INR 655000 with investments (80C/80CCD) of INR 150000 or having taxable income INR 505000 before Donation, can save INR 9040, if he choose to donate INR 5000 in such charitable organization where 100% deduction allowed, like PM Relief funds, PM Care funds etc.

So if you one of those having such income close to INR 5 Lacs, can review your tax statement and plan your donation before Financial Year 2020–21 comes to end, i.e., before 31-Mar-2021.

Moreover, if you have already donated or planning to donate, you need to take proper receipts to avail tax benefits in your [Income tax return].

#80G #TaxDeduction #TaxSaving #IncomeTax #ITR #TaxReturn #IncomeTaxIndia #GoTaxfileIndia

DG Gupta
DG Gupta, CA, CS

Jan 24, 2021 09:43

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