Things to keep in mind while donating towards charitable causes

 I have been working as an accountant under CA for the last 10 years. All these years I have handled income tax and sales tax filings for several people and businesses. From my experience, I would like to share some of the things that you should be aware of before making charitable donations.



1. You should choose the organisation wisely. Ensure that they have the license to function and the government approval to get donations for children.

2. It will be good to check about their previous projects and how successful they were in utilising funds towards the specified cause. 

3. Make sure that the modes of payment available are safe and secure. 


Things to be noted to get a tax deduction

1. If you are a taxpayer you are automatically qualified to claim a tax deduction under Section 80G. You need to either be a resident Indian or a non-resident Indian (NRI) with an Indian passport. In both cases, you should have a taxable income in India to qualify for an exemption.

2. Make sure the organisation you are donating to is formally registered with the Income Tax Department. If you wish to donate money to NGO, clarify whether it is registered under section 12 A. 

3. While donating money to an NGO, remember to make the payment either through demand draft, online banking, or through debit/credit card. You will not be able to avail tax deductions if you donate in the form of cash exceeding Rs2000.

4. You will need to get a receipt with the amount that you have donated to the organisation with its stamp as proof for you to avail of the tax benefit.

5. Check if your donation qualifies for a 50% or a 100% tax deduction. Request the NGO for Form 58 which contains details such as the total project cost, the authorized amount, as well as the funds collected so far by the institution. Without this form, your tax claim stands rejected.

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