Latest Expert Exchange Queries

GST Demo Service software link: https://ims.go2customer.com
Username: demouser Password: demopass
Get your inventory and invoicing software GST Ready from Binarysoft info@binarysoft.com
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
 
 
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing | GST - Goods and Services Tax
 
 
 
 
Popular Search: empanelment :: TDS :: cpt :: Central Excise rule to resale the machines to a new company :: ACCOUNTING STANDARD :: TAX RATES - GOODS TAXABLE @ 4% :: due date for vat payment :: articles on VAT and GST in India :: ARTICLES ON INPUT TAX CREDIT IN VAT :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: form 3cd :: list of goods taxed at 4% :: VAT Audit :: ACCOUNTING STANDARDS :: VAT RATES
 
 
« News Headlines »
 Deadline to file returns extended to 28 August for biz with transitional
 GST input tax credit form
  How to rectify income tax returns
 Govt extends tax exemption for industry in North East, hilly states
 Should you file revised Income Tax returns; find out here
 Tax Deducted at Source (TDS) in Goods & Services Tax (GST)
 10 companies that blamed GST for soft June quarter
 How will GST impact the Indian economy
 10 days left to file your first GST return. This is how you do it
 What is property tax and how is it calculated…
 File income tax returns in time to carry forward losses

A good deed can keep taxman away
January, 04th 2008
Did you know donations are not only good karma, but can also give tax relief? Ernst & Youngs Mayur Desai & Umang Shah tell you how to make use of generosity.

The tax laws are kind to those who donate. Yes, if you have made a donation in cash (not kind), you should examine the provisions of section 80G of the Income Tax Act, 1961, which may provide you some tax relief. You should understand two elements: basic prescribed limit and limits for individual donations.

Basic prescribed limit: The maximum amount that you can donate to eligible charities, to get tax benefits is limited to 10% of your gross total income reduced by other deductions available under the Act (from section 80C to 80U), which are wide ranging and include PF contribution, LIC premium to name a few. However, certain donations, like those to the National Defence Fund and PMs National Relief Fund are not subject to this limit.

Limits for individual donations:

Further, the quantum of tax deduction also depends on the institution to which the donation is made. Not all donations are eligible for a 100% tax relief. For instance, if you have donated to a local orphanage, which has obtained an 80G approval, only 50% of the donation would be subject to tax relief. Further, it would also fall within the basic prescribed limit criteria (refer table).

Let us consider an illustration. Sharon decided on an impulse to donate to a local orphanage. Fortunately, the orphanage had got an 80G approval entitling her to claim the tax break. But Sharon could only get a part of the donation as a tax break. Here is the math:

Her gross total income, as explained above, was Rs 5 lakh. She made a donation of Rs 1 lakh. However, 10% of her gross total income works out to just Rs 50,000. Against this Rs 50,000 (which is the maximum limit up to which she can claim a deduction, even though her actual donation is Rs 1 lakh), she will get a deduction of only 50%. Thus the deduction for her will be Rs 25,000.

However, if Sharon had purchased furniture, she would have lost out on this limited benefit. Donations in kind are not eligible for deduction under the Act. Sharon should also ensure that she gets the receipt of the donation given by her, and also obtain a copy of the certificate under section 80G of the Act. There has been one major change in the tax laws relating to donations. With effect from April 1, 2006, the government has taken steps to restrict secret donations. This is done by enacting specific provisions to deem the anonymous donation as income taxable at a maximum marginal rate of 33.99% in case such donation is got by a university, educational institution, hospital or trust. It appears that this amendment can curb flow of unaccounted money.
 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2017 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Binarysoft Technologies - Company Overview

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions