Tax Deductions for Organizations Charitable, and Social Service entities in India can avail various while filing their Income Tax Return (ITR).
These deductions help reduce their taxable income, resulting in lower tax liability.
Here are some key deductions available:
1. Section 11:
Charitable and Religious Trusts (Section11) – Under this section, income applied for charitable or religious purposes is exempt from taxation.
Charitable organizations can claim deduction for income utilized for philanthropic activities, subject to certain conditions.
2. Section 12A and 12AA:
Registration for Tax Exemption (Section12A Section12AA) – Organizations engaged in charitable or social service activities need to get registered under these sections to avail tax exemption.
Once registered, they can enjoy tax benefits on the income generated for charitable purposes.
3. Section 80G:
Donations to Charitable Institutions (Section80G) – Donors to registered charitable organizations can claim deductions on donations made.
The extent of deduction varies based on the type of institution and the percentage of the donation eligible for deduction.
4. Section 35AC:
Approved Projects for Rural Development (Section35AC) – Businesses that fund approved projects for rural development can claim 100% deduction on the amount contributed.
The deduction is available for specified activities, fostering social welfare and economic growth.
5. Section 10(23C):
Exemption for Educational and Medical Institutions (Section10(23C)) – Educational and medical institutions can enjoy tax exemption if they meet specific criteria laid out in this section.
The income generated from these activities is exempt from tax.
6. Section 10(23BBA):
Income of Infrastructure Debt Fund (Section10(23BBA)) – Income of Infrastructure Debt Funds set up to finance infrastructure projects is exempt from tax under this section.
This encourages investment in critical infrastructure development.
7. Section 80GGA:
Donations for Scientific Research and Rural Development (Section80GGA) – Individuals who are not earning business income can claim deduction for donations made towards scientific research or rural development projects.
8. Section 80GGB and 80GGC:
Political Contributions (Section80GGB Section80GGC) – Organizations making political contributions can avail deductions under these sections.
While businesses can claim deductions under 80GGB, individuals can claim under 80GGC.
9. Section 10(23)(C):
Exemption for Trade Unions and Professional Associations (Section10(23)(C)) – Trade unions and professional associations can claim exemption for their income if they fulfill the conditions specified in this section.
10. Section 35CCA and 35CCB:
Expenditure on Skill Development Projects (Section35CCA Section35CCB) – Businesses can claim deductions for expenditure incurred on skill development projects for eligible employees under these sections.
It’s important to note that these deductions have specific conditions and requirements that need to be met.
Organizations and entities engaged in charitable and social service activities should ensure compliance with relevant regulations and maintain proper documentation to substantiate their claims for tax deductions.
Consulting with a tax professional is advisable to maximize the benefits and ensure accurate ITR filing.
To visit: https://www.mca.gov.in/
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