Skip to main content

Charity Can fetch you Tax Benefit

Invest In Tax Saving Mutual Funds Online

Call 0 94 8300 8300 (India)

 

Charity Can fetch you Tax Beneficial

Furnish donation receipts with Form 16 to claim deduction



Salaried individuals are likely to get a mail from their HR department soon asking them to collect Form 16, a crucial document needed to file tax returns that contains the details of a person's income, tax breaks claimed and tax liability. However, the document doesn't account for deductions on donations made under Section 80G. That means, if you have made any donation that qualify for tax deduction under Section 80G, you will have to furnish details of donations made while filing your return and claim a refund. At least this year.


From the financial year 2012-13, employers have been again given the option of accepting receipts for donations made and incorporating it in Form 16. So, technically, the I-T department has given employers the option to consider donation receipts and provide benefits under Section 80G. However, many employers and employees are not aware of this development.


Employees will have to claim deductions on donations made on their own, unless they were chanelled through their employers. Employees can claim deduction for donations made to any fund or charitable institution at the time of filing the tax return. For some donations made through the employer to specified funds such as Prime Minister's National Relief Fund, the Chief Minister's Relief Fund or the Lieutenant Governor's Relief Fund, the deduction can be considered at the time of tax-withholding by the employer.


The first step is to understand the extent of deduction allowed on your act of charity. Unlike tax concessions under Section 80C, the deduction on donation is subject to limits, depending on the category its falls into. And, tax consultants point out that not identifying the right limit is the most common error that taxpayers make. So, before filing your return, you need to ascertain the gross qualifying amount. This will be the aggregate of all donations made during the year.

Next, you need to calculate the net qualifying amount.


Out of the donations bracketed under gross qualifying amount, there will be some that will be eligible for 100% deduction (A) and some for 50% (B). Then, there is another category where the donation is eligible for 50% deduction, but is subject to an upper limit of 10% of adjusted gross total income (C).

So, net qualifying amount – that is, A+B+C – will be deducted from your gross total income and the balance will be taxed. You can look up the list of charities that entitle you to benefits under Section 80G. For instance, donations made to Prime Minister's National Relief Fund or National Defence fund will be eligible for 100% deduction, without any qualifying limit. In case of donations to Prime Minister's Drought relief fund, National Children's Fund, etc, the relief is restricted to 50%. Then, there is a third category that covers charities approved by the Income Tax Department – you can ascertain their eligibility on the basis of the certificate they furnish. A certificate issued by the respective trust/institution is required to substantiate the claim under Section 80G or the certificate issued by the Drawing and Disbursing Officer (DDO) or the employer. The list would include charities like Child Relief and You (CRY), In Defense of Animals and so on. If you are donating funds to their causes, you can claim a deduction of 50% of the amount. However, the sum total of donations in this category cannot exceed 10% of adjusted gross total income. Make sure you preserve the receipts of donations, which usually carry a stamp specifying that the charity is eligible for 80G deductions, issued by the NGOs. "While you do not need to attach any documentary proofs along with your tax return, you need to have the certificate and PAN of the charity while filing the return.


Maintaining these records will also come to your aid should the tax authorities ask you to furnish the receipts at a later stage. This apart, you need to bear in mind the implications of donating money in the form of cash. From financial year 2012-13, cash donations in excess of . 10,000 will not qualify for deduction under Section 80G.


The entire process will come to a close once the refund amount is credited to your account. At your end, you need to provide all the details and track the refund claim till it reaches your bank account.

Happy Investing!!

We can help. Call 0 94 8300 8300 (India)

Leave your comment with mail ID and we will answer them

OR

You can write back to us at PrajnaCapital [at] Gmail [dot] Com

---------------------------------------------

Invest in Tax Saving Mutual Funds ( ELSS Mutual Funds ) to upto Rs 1 lakh and Save tax under Section 80C.

Invest Tax Saving Mutual Funds Online

Tax Saving Mutual Funds Online

These links can be used to Purchase Mutual Funds Online that are regular also (Investment, non-tax saving)

Download Tax Saving Mutual Fund Application Forms from all AMCs

Download Tax Saving Mutual Fund Applications

These Application Forms can be used for buying regular mutual funds also

Some of the best Tax Saving Mutual Funds available ( ELSS Mutual Funds )

  1. ICICI Prudential Tax Plan Invest Online
  2. HDFC TaxSaver Invest Online
  3. DSP BlackRock Tax Saver Fund Invest Online
  4. Reliance Tax Saver (ELSS) Fund Invest Online
  5. Birla Sun Life Tax Relief '96 Invest Online
  6. IDFC Tax Advantage (ELSS) Fund Invest Online
  7. SBI Magnum Tax Gain Scheme 1993 Invest Online
  8. Sundaram Tax Saver Invest Online
  9. Edelweiss ELSS Invest Online

------------------

Best Performing Mutual Funds

    1. Largecap Funds Invest Online
      1. DSP BlackRock Top 100 Fund
      2. ICICI Prudential Focused Blue Chip Fund
      3. Birla Sun Life Front Line Equity Fund
    2. Large and Midcap Funds Invest Online
      1. ICICI Prudential Dynamic Plan
      2. HDFC Top 200 Fund
      3. UTI Dividend Yield Fund
    1. Mid and SmallCap Funds Invest Online
      1. Reliance Equity Opportunities Fund
      2. DSP BlackRock Small & Midcap Fund
      3. Sundaram Select Midcap
      4. IDFC Premier Equity Fund
    1. Small and MicroCap Funds Invest Online
      1. DSP BlackRock MicroCap Fund
    1. Sector Funds Invest Online
      1. Reliance Banking Fund
      2. Reliance Banking Fund
    1. Tax Saver MutualFunds Invest Online
      1. ICICI Prudential Tax Plan
      2. HDFC Taxsaver
      3. DSP BlackRock Tax Saver Fund
      4. Reliance Tax Saver (ELSS) Fund
    2. Gold Mutual Funds Invest Online
      1. Relaince Gold Savings Fund
      2. ICICI Prudential Regular Gold Savings Fund
      3. HDFC Gold Fund

Popular posts from this blog

Surrender ULPPs

  ICICI Pru LifeTime and ICICI Pru Lifestage are Unit Linked Pension Plans. Such insurance linked retirement plans are neither good investments nor do they offer sufficient insurance cover. As you can see, these have turned out to be bad deals. In the Lifetime plan, the fund value is not even equal to the total premiums that you have paid and in the Lifestage plan your return is just about 6% which is quite low. The mortality charges are as per your age which is why they have increased. Moreover, once these plans matures, you will have to compulsorily opt for annuity (regular income) and the annuity rates are generally modest. Assuming these plans mature in the next one year, it will be wise to surrender the plan now and curb your future commitments.   Before you choose to buy a term plan, you have to consider a few points. You need to insure yourself, only during the time you are working and your family is financially dependent on you. At the age of 59, not all insurance companies w...
Read more

ICICI Pru Constant Maturity Gilt dividend

Invest ICICI Prudential Constant Maturity Gilt Fund Online ICICI Prudential Mutual Fund   has announced dividend under the following schemes: Scheme Dividend ( R /unit) ICICI Pru Constant Maturity Gilt-DQ 0.26543239 ICICI Pru Constant Maturity Gilt Direct-DQ 0.27171609 ICICI Pru Q Interval Plan I-D 0.10617296 ICICI Pru Q Interval Plan I Direct-D 0.10703967 ICICI Pru Q Interval Plan I Ret-D 0.10617296             The record date has been fixed as June 13, 2016.   ----------------------------------------------- Invest Rs 1,50,000 and Save Tax under Section 80C. Get Great Returns by Investing in Best Performing ELSS Mutual Funds Top 10 Tax Saver Mutual Funds to invest in India for 2016 Best 10 ELSS Mutual Funds in india for 2016 1. BNP Paribas Long Term Equity Fund 2. Axis Tax Saver Fund 3. Franklin India TaxShield 4. ICICI Prudential Long Term Equity Fund 5. IDFC Tax Advantage (ELSS) Fund 6. Birla Sun Life Tax Relief 96 7. DSP BlackRock Tax Saver Fund 8. Reliance Tax Saver (ELSS) ...
Read more

NPS Investment Choice for Safe Investors

Invest NPS Online       Whether they invested through SIPs or put in a lump sum amount, risk-averse individ uals have earned the highest returns. These are investors who stayed away from stocks and divided their NPS corpus between G class gilt funds and C class corporate debt funds. On average, gilt funds have given 9.75% annualised returns while corporate debt funds have churned out more than 11% in the past five years. As a result, the average return for ultra-safe investors in the past five years is in double digits. Even in the short term, ultrasafe investors have been the biggest gainers among NPS investors. Will the good times continue? The gilt funds of NPS are holding long-term bonds with an average maturity of over 19 years and a modified duration of about 9 years.These funds have done well because interest rate cuts have pushed down bond yields. But experts say this trend will not stay forever. NPS is a long-term investment and the bonds are predominantly held to matu...
Read more

Buy Health Insurance Plan even if you are covered with my Employer

Buy Health Insurance Plan Online Yes, getting a private insurance cover now, which extends beyond your retirement age, is recommended There are a few reasons why buying a health insurance plan may make sense even though you get medical insurance from your employer. Here are the points you need to think about. Firstly, your employer's insurance coverage will only protect you as long as you are employed with the company. The policy will terminate when you quit the job or when you retire. Post retirement is perhaps the phase when one needs it the most but you won't have it then. Moreover, buying a new insurance policy after the age of 50 means that there will be no coverage for pre-existing diseases.   Lastly, health insurance policy you get from your employer may or may not cover your dependants. ------------------------------ ----------------- Invest Rs 1,50,000 and Save Tax under Section 80C. Get Great Returns by Investing in Best Performing ELSS Mutual Funds Top 10 Tax Saver M...
Read more

SBI MAGNUM MIDCAP ONLINE

Invest SBI MAGNUM MIDCAP ONLINE   SBI MAGNUM MIDCAP fund didn't fare well in its initial years but, in recent years, has steadily improved its performance under the capable hands of its current fund manager. Although investing predominantly in mid-cap stocks, the average market capitalisation of its portfolio is lower than other category peers.   Although the stock selection approach is mostly bottom-up , the fund manager doesn't shy away from taking bold sector bets , as is reflected in its large exposure to the healthcare sector. She is equally adept at handling performance across market cycles--the fund has captured more of the upside during market upticks and contained the downside during downturns in a better manner than its peers.   Given its superior risk-reward equation, the fund is a worthy pick in its category.     ----------------------------------------------- Invest Rs 1,50,000 and Save Tax under Section 80C. Get Great Returns by Investing in Best Performing EL...
Read more
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now