Almost any NGO can be approved under section 80g (2)(iv). Important conditions for this are:
1.The NGO’s income should be exempt from income tax; Its income and assets are used for the charitable purpose only. Also, the benefits should not be limited to a religious community or caste
2. It should maintain proper accounts. It should be a public trust, registered society or a nonprofit company. If the NGO is running some business, then it should keep separate books for the business. The donations should not be used for the business. Also, it should certify both these conditions to the donor. Finally, the Commissioner of Income Tax (CIT) should approve.
tax deduction under 80g registration
3 the NGO and ngo registration for this purpose. Non-profit or charitable organizations (NGOs) do not have to pay income tax on their own income. Forgetting this advantage, they have to register under section 12A or under section 10(23)(c) . Some other conditions also apply. On the other side, people who donate money to NGOs can also claim some tax deductions.
Why? Because the Government recognizes that these organizations perform a useful function. These deductions are useful for individuals, companies and other tax-paying organizations. Obviously, these are not relevant for grant-making Agencies, which are exempt from Income Tax. What are these deductions? We discuss here the law in India.
Many people donate things other than money. The land is a common example. Other examples are buildings, clothes, used equipment, food items, shares, employee stock options, jewelry, etc. The donor in India cannot claim any of these as a tax deduction. But donations of money to NGOs can be claimed as a deduction from income. This means that the donor’s total income is reduced. So he or she pays tax on a lower amount. The donor can claim 50% to 125% of the donation. The percentage depends on the approval for the NGO. Most of the NGOs are approved under section 80G or under 35AC. Apart from these two, there are three other possible sections 1.
If the NGO is not approved under any of the five sections, you cannot claim a deduction. People who have a business or professional income should claim 125% deduction under section 35. People who do not have any such income can claim only 100% under section 80GGA.
The main difference between 80G and 35AC is the percentage of deduction. Under 35AC, the donor gets a 100% deduction from their income. Secondly, you can donate up to 100% of your income also. The limitation of 10% for 80G donations does not apply here.
