ITR AY 2020–21: Tax Benefits Against Different Types Of Contributions Under Section 80G, Know All

As we reach the last quarter of 2020/21, here’s a glance at how better to verify your tax savings and take action to put an additional amount of money into your wallet if necessary. Under Section 80G of the Income Tax Act, contributions made to certain relief funds and charitable organisations can be claimed as a deduction. That being said, all contributions are not valid under section 80G for deductions. As a deduction, only contributions made to approved funds count. Any taxpayer-individuals, corporation, business or any other party can claim this exemption. Below are the types of contributions that can be claimed as a deduction.

Method of payment: This exemption can be claimed only if the donation is paid by a cheque, draft or in cash. But if the contributions made in cash exceed Rs 10,000, the deduction is not permitted. Under section 80G, in-kind donations such as food, supplies, clothes, medications, etc. do not count for deductions. Any contributions made in cash above Rs 2,000 will not be allowed as a deduction from the 2017–18 financial year onwards. To count as a deduction under section 80G, contributions over Rs 2,000 should be made in any way other than cash.

Originally published at https://www.informalnewz.com on December 21, 2020.