Charity and Donation Guidance

Tax Benefits of Donations

Making charitable donations can provide you with tax benefits under the Income Tax Act. Here are the key provisions:

Section	Deduction	Type of Organizations
80G	50% to 100% of donation amount	Registered charitable trusts, societies, and specific funds
80GGA	100% of donation amount	Research associations, universities, and scientific research organizations

Important Notes:

• Always ask for a receipt with the organization's 80G registration number.
• Cash donations above ₹2,000 are not eligible for tax benefits.
• Donations must be made to registered organizations.

How to Verify a Charitable Organization

Before donating, verify the legitimacy of the organization:

1. Check Registration: Verify if the organization is registered under the Societies Registration Act, Trusts Act, or Section 8 of the Companies Act.
2. Tax Exemption Status: Confirm the organization has valid 80G certification from the Income Tax Department.
3. FCRA Status: If the organization receives foreign funding, check if it has Foreign Contribution Regulation Act (FCRA) approval.
4. Annual Reports: Review the organization's annual reports and financial statements.
5. NGO Darpan Portal: Verify if the organization is registered on the NGO Darpan portal maintained by NITI Aayog.
6. Transparency: Check if the organization clearly states how donations are utilized.

Types of Donations

• Monetary Donations: Direct financial contributions to charitable organizations.
• Material Donations: Clothing, food, books, medical supplies, etc.
• Skill-based Volunteering: Contributing professional skills and time.
• Corporate Social Responsibility (CSR): Companies can contribute 2% of their average net profit to CSR activities.
• Crowdfunding: Contributing to campaigns on platforms like Milaap, Ketto, and Impact Guru.
• Payroll Giving: Regular deductions from salary for charitable causes.
• Planned Giving: Including charities in wills and estate plans.

Best Practices for Donors

1. Research Before Donating: Investigate the organization's track record, impact, and financial transparency.
2. Check Administration Costs: Understand what percentage of donations go to actual programs versus administrative expenses.
3. Regular Donations: Consider setting up monthly donations for sustained impact rather than one-time contributions.
4. Follow Up: Request updates on how your donation has been utilized.
5. Diversify Your Giving: Support different causes to create broader social impact.
6. Local Involvement: Consider donating to local community organizations where you can see the impact directly.
7. Documentation: Keep proper records of all donations for tax purposes.