Charitable giving helps save taxes. Here are 5 NGOs worth donating to.

Sep 27, 2019 | 2 months ago | Read Time: 3 minutes | By iKnowledge Team
Credit: In Search of Simplicity

Charity is one of the basic tenets of every religion. But it can also be instrumental in financial planning.

Under Section 80-G of the Indian Income Tax Act, you are eligible for income tax deductions for charitable donations made to a list of prescribed organizations, trusts and relief funds. The deduction from gross total income is applicable only on the amount which has been donated. Deductions can be claimed while filing the ITR (Income Tax Return). Leading insurance provider Aegon Life advocates charitable donations as one of the top five strategies for tax saving.

However, not all donations to any and every organization are redeemable at the end of the financial year. Only those made to specified relief funds and charitable institutions qualify as tax deduction.

Here are the primary government run programs where you can contribute to the nation’s infrastructure, social and economic growth. Besides, donating in these programs also entitles you to 100% tax deduction.

Prime Minister’s National Relief Fund (PMNRF)

This fund was founded by the country’s first Prime Minister Pandit Jawaharlal Nehru in the year 1948 to assist displaced people from Pakistan. Today, the PMNRF continues to depend on public contributions, and keeps up with work of serving those in need of contingency and immediate relief, especially to families affected by natural disasters and victims of the major accidents, riots and conflicts. Sustained entirely by donations from civilians and corporations, the PMNRF [1] also assists in partially lessening the financial burden of expensive medical procedures like heart surgery, kidney transplantation, cancer treatment and acid attacks.

National Defense Fund

The National Defense Fund (NDF) accepts voluntary donations from individuals, organizations, trusts, companies and institutions for promotion of the national defense effort and the welfare of the members of the Armed Forces including their dependents. It is supervised by an Executive Committee and is headed by the Prime Minister with Defense, Finance and Home Ministers as dignified members. The fund is based entirely on voluntary contributions made by the public and devoid of budgetary allocations. Contributions can be made directly through NDF’s site or via the State Bank of India. Details are listed on their website.[2]

The National Foundation for Communal Harmony (NHCH)

Addressing a pressing need of the hour, this fund assists in the rehabilitation of young victims of communal, class and social violence. Through its programs, the NFCH hopes to foster and instill communal harmony, integration and consciousness through collaborations with state governments or NGOs. The Foundation also sponsors, manages and publishes studies conducted on the state of communal harmony and national integration in the nation. The fund runs based on investments, supported by donations from individuals and public-sector enterprises.

National Sports Development Fund (NSDF)

Established in 1998 under Charitable Endowments Act, the NSDF aims to promote sports and games in the remotest part of the country, by using the donations received on various disciplines and to assist individual sportspersons to achieve excellence at the National and International level. The NSDF also offers special training and coaching in cases of applications made out to the fund seeking the same. The donations and percentage deductible remain the same as with others.

Alternatively, those who wish to improve the arts and culture can donate to the National Cultural Fund.

Education syndicates

Approved universities or educational institutions of national eminence, centers studying rural development, and scientific research institutes are also avenues you may like to explore as a philanthropist. Not only will you have a major role to play in the country’s education sector and stay on top of the research work being done in fields of social and pure sciences, but these donations are also completely tax deductible.

Usually, donations to charitable and non-profit organizations are eligible for a 50% tax benefit. Only monetary transactions are eligible for refund and can be claimed by a taxpaying individual or a firm. Since 2017-2018, cash donations exceeding Rs. 2,000 are not eligible for deductions.

Donations to UNICEF and couple of other reputed global organizations are not eligible for tax exemption.

So, before you donate with the hope of filing it in your tax returns forms, check if your charity is permitted to give tax exemption benefits.

That said, there may be plenty of other ways to save taxes, as pointed out by Aegon Life in their list of successful tried and tested tax saving strategies. Investments made in Aegon Life’s term insurance and life insurance policies can save you a lifetime of anxieties and expenses.

Citations

1 https://www.pmnrf.gov.in/aboutpmnrf.php

2 https://ndf.gov.in/aboutndf.php


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