It is that time of the year when we are all busy closing the financial year. It is also the time where we are preparing to file our tax returns and hence planning to look for optimum ways to save on the same. While there are many ways one can save on taxes, 80G donation for NGO in India is one where one can save on their taxable income and contribute to a greater good. 

In an effort to encourage philanthropic activities the Government of India has made a provision under section 80 G of the Indian Tax Act, 1961, whereby donations made to certain NGOs are tax exempt. Thus, by donating to an NGO one can give to a cause that is targeted at the larger good for society and at the same time bring down the amount of taxable income. One needs to be an Indian resident or a non-India resident with an Indian passport to be able to claim this exemption. 

While one can support an NGO that one knows of, the advent of online donations has made the process of supporting an NGO quite simple. One can search for a cause that resonates, look for credible NGO working in that area and make an online donation. 

The following steps can be kept in mind while choosing an NGO to avail tax exemption under section 80G of the Indian Income Tax Act, 1961: 

Select the NGO: The first step is of course to select an NGO one wants to support. This can be an NGO where one has some previous contact or one can search for an NGO online. One must choose the best NGO to donate money to. With online donations it is possible to support an NGO or a cause which may have operations in a different geographical territory. While sitting in Mumbai, for example, one can donate to an NGO in Delhi. 

Visit the NGO or the website: On selecting the NGO on can visit the NGO if logistically convenient as this provides information about the authenticity and credibility of the organisation. If this is not possible then a thorough google search and keeping a tab on the social media handles should throw some light on the work the NGO is doing, the impact it is making and the credibility of the same. 

Make the Payment: On selecting the NGO, one can donate the amount one wishes to. Most NGOs today also provide different options to donate- one can make a one-time donation or a monthly donation. For being able to receive an exemption for an 80G donation for NGO in India, it is important to note that cash donations exceeding Rs 2000 are not eligible for donations. One can donate by cash (upto Rs 2000), cheque or a bank transfer. Donations made in kind are also not eligible for tax deductions. 

Donation receipt: On making the donation, the NGO needs to issue a receipt of the donation which is needed for filing for the tax claim. To claim the deduction under section 80G, the taxpayer must obtain a receipt or 80G certificate from the institution or fund to which the donation has been made.

Claiming the deduction: To claim a deduction, the following must be submitted along with the income tax return: name and PAN number, address, amount eligible for donation and the amount of contribution.  The deduction can be claimed up to a maximum of 50% or 100% of the donated amount, depending on the institution or fund to which the donation has been made.

Thus, by donating to a registered NGO, one can get a tax benefit as well as support a cause that benefits the lesser privileged people in society. This is a great initiative started by the Government of India to encourage both individuals an organisations to contribute to a greater good while providing the people making the donation tax benefits. Thus if one is still in the process of filing their tax returns, it is a good idea to make a donation by looking for a NGO to donate money to and double the impact of giving. It is also good to remember that many NGOs are doing some great work on the ground helping people who struggle with access to basic resources in uplifting them and helping them lead a better-quality life. It should be a moral duty on our part to do what we can to give back to society.