Is the donation I made to a charitable institution exempt from tax?
Any donation made to a prescribed charitable institution in India qualifies for deduction under Section 80G
I have made Rs 10,000 donation to a charitable institution. Is this donation exempt from tax?
Sumana Mukherjee, Bangalore
Any donation made to a prescribed charitable institution in India qualifies for deduction under Section 80G. However, any such donation made to an institution outside India is not eligible for deductions. Normally, 50 per cent of the amount donated is allowed as deduction from the income of the individual. This is subject to a maximum of 10 per cent of the gross total income of the individual as computed according to the prescribed tax law.
Donations made over the allowed limit will not qualify for tax deduction. However, there are some donations, where this limit of 50 per cent of the amount donated does not apply. Even such donations can be claimed as deduction from your taxable income subject to the 10 per cent of the gross total income. Donations made to certain government funds, such as Prime Minister’s National Relief Fund, qualify for 100 per cent deduction without any upper limit which is linked to the gross total income.