Big news! Changes In Income tax exemption rule

In order to claim tax exemption under Section 80G of the Income Tax Act, uploading the donation receipt certificate issued by the relevant organization when filing your income tax return is necessary. Please do so to avoid the unavailability of the tax exemption.

Big news! Changes In Income tax exemption rule: Now an income certificate needs to provide to get tax exemption on this

In order to claim tax exemption under Section 80G of the Income Tax Act, uploading the donation receipt certificate issued by the relevant organization when filing your income tax return is necessary. Please do so to avoid the unavailability of the tax exemption.

When you make donations to charitable institutions, religious institutions, or non-governmental organizations, you can benefit from tax exemptions under Section 80G of the Income Tax Act. To avail of this benefit, it is important to upload the donation receipt certificate issued by the relevant institution while filing your income tax return. Without this certificate, tax exemption cannot be claimed. It is worth mentioning that the extent of tax exemption varies based on the categories of entities, ranging from 50 to 100 percent.

10BE Certificate: 

Under the Income Tax regulations, it is mandatory for charitable or religious institutions, as well as NGOs, to report all donations received throughout the entire financial year to the Income Tax Department. Additionally, the individual making the donation is required to issue a Form 10BE certificate. 

This process enables the Income Tax Department to verify the accuracy and alignment between the donations received by the institution and the tax exemptions claimed by the income taxpayer. Therefore, the Form 10BE certificate serves as crucial evidence of tax exemption when filing the income tax return.

No Deduction For Cash Donation

Taxpayers have the opportunity to claim tax exemption for donations made in cash, check, or through online modes. However, it's important to note that the exemption cannot be claimed for cash donations exceeding Rs 2,000. The Income Tax Department permits tax exemption only for donations made through checks or online payment methods.

The benefit of tax exemption on the donated amount can only be claimed under the old tax regime. Therefore, income taxpayers must choose this arrangement at the start of the financial year if they wish to avail of this deduction. It is not possible to claim this deduction in the new tax regime.

When filing Form 10BE with the Income Tax Department, certain details need to be provided. The form can be submitted electronically using either the Electronic Verification Code (EVC) or Digital Signature. 

It is mandatory to include the name, address, PAN number, and Aadhaar number of the donor in the form. Additionally, the registration number and stamp of the relevant institution must also be provided. The Form 10BE should be filed on or before the 31st of May of the financial year in which the donation was made.

The Income Tax Department has categorized trusts and institutions to determine the extent of tax exemption that can be claimed. Donations made to religious institutions or charitable institutions are eligible for a tax exemption of 50 percent. 

On the other hand, government organizations or charitable organizations recognized by the government for social work or social welfare activities enjoy a full tax exemption of 100%. These categories help determine the percentage of tax exemption that can be availed based on the nature of the institution or organization.

 

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Resources from: https://www.myitronlinenews.com/in/big-news-changes-in-income-tax-exemption-rule

 

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