The government has tightened the rules for claiming tax benefit on charity. Tax benefits can be claimed on donations made to recognized charitable institutions or NGOs. This tax benefit is available under Section 80G of the Income Tax Act, 1961 .
Now the government has changed the rules for claiming tax benefits under this section. Now a certificate like TDS will be necessary for this. You will have to download this certificate from the e-filing portal of the Income Tax Department. Let us know about this in detail.
What is the new provision?
As per the new provision of section 80G, the donation certificate will be considered as proof of donation. It has to be downloaded from the income tax portal. Earlier, this certificate was not required to claim tax benefits on donations. This rule was applicable till the financial year 2020-21. Then the tax benefit could be claimed with the help of a receipt issued by the institution to which the donation is being made. After that the government changed this rule.
Must download donation certificate
The Income Tax Department has made the rules for availing other benefits including claiming tax benefits online. Now the process of claiming tax-benefit on donations under section 80G has also been made online. Now the donations received by charitable institutions are matched against the claims made by the taxpayers.
For this, it is necessary for the Charitable Institution or NGO to put the statement of all the donations received in a financial year on the website of the Income Tax Department. Apart from this, it is necessary to issue a separate certificate to the person doing the charity.
Donation statement has to be filed before May 31
The charity receiving institution or NGO has to file the statement of donation in Form 10BD. It is required to be filed electronically on the e-filing portal of the Income Tax Department. It is necessary to file the statement of donation for the institution or NGO before 31st May of every financial year.
understand with the help of example
We can understand this easily with the help of an example. Suppose you donate Rs 1 lakh to a recognized organization on August 1, 2022. This donation is done in the financial year 2022-23. The company receiving the donation will have to submit its statement on the website of the Income Tax Department by May 31, 2023.
When you file your income tax return for the financial year 2022-23, you will have to give complete information about the donation certificate. The Income Tax Department will match the information given by you with the statement of donation filed by the institution. Your claim of tax benefit will be approved only after matching it.