Given the poverty, suffering, helplessness, morbidity, and sorrow in the universe, it does give out a dystopian image but if winter’s here can spring be far behind? Our moral conscience persuades us to do our bit in order make the society a better place to live. Thus, we donate to charitable trusts and NGOs generously so the children and orphans are given the preferential treatment, become educated to be the breadwinners of tomorrow. Ingenious donations are acts of charity and organizations and NPOs which are vigorously doing for the underprivileged and needy deserve more funding in order to keep the job going. But any organization, even if it is a non-governmental or non-profitable, needs to go through rounds of audits and other accounting formalities to keep clarified books of accounts. So donation tax exemption is not easy as it sounds but there are some criteria, and if this is your maiden donation, this following information will really be helpful:
Effective Help and Homecare for Elderly- The foremost purpose of an NGO is to help the underprivileged and the ones in dire straits. They work effectively and provide extensive support to the people with the accumulation. For the elderly, who live alone and need continuous assistance to run their daily errands, these non-profit organizations take utmost care for that.
The Real worth of donations- To make a donation of almost anything to a non-profit organization is permissible. However, the organization assigns a value for the donated item as per the accounting guidelines suggested by professionals.
Under Section 35 AC- Any donation under sec35 ac received by a non-profit enterprise must be exchanged with a valid receipt to the donor. Using this receipt, the donor can claim an exemption on tax payable. This receipt must be within the validity time period of 34 ac and hold a date and 35 ac number. The receipt must be issued using the FORM 58a or the donation certificate to the donor. A tax exemption for a donation is applicable only for business and people earning a professional income. Any individual with any other income source is not suitable for a 35ac tax exemption.
Under sec 80g- An individual who has an income source other than professional income or business, must claim the exemption for donation under 80g if it is not applicable under 35 ac. Any assessed or any individual who is making an applicable donation is eligible for getting tax deductions and are subjected to certain conditions. Here, no restrictions are made in regard to deductions made for the people, firms or to any specific taxpaying category.
Conditions- One must also keep in mind while making a donation that only cash and cheque related donations are eligible for deductions claims. This means if someone is donating goods or physical help, food, and others, these are not eligible for any claims. Also, any donation which is made towards an overseas non-profit organization is not eligible for a deduction.
Beware of deceitful organizations- There is a maelstrom of numerous trusts and enterprises claiming to be bona fide practitioners. Only genuine firms can provide tax-related benefits. The government of India has made it mandatory for all non-profit organizations to get themselves registered under the Income Tax Department. It’s better to stay au courant of what ill-practices that take place behind a veil.
Elderly people need a different kind of assistance as with age, performing even the simplest chores becomes an uphill climb. Moreover, going through medical checkups, timely medicine intake, healthy lifestyle, food and a secured help is provided by many NGOs. These are supported by the governments and donations from individuals who provide care for the deprived and elderly population.