How to Claim Section 80G Deduction for Donations Under the Income Tax Act
Making donations towards charitable causes is an excellent way to contribute to society while also enjoying tax benefits under the Indian Income Tax Act. Section 80G deduction provides a golden opportunity for taxpayers to claim deductions on contributions made to specified charitable institutions and relief funds. By understanding how to avail these deductions strategically, you can optimize your tax outgo while aligning with your chosen cause. This article will guide you through the process of claiming Section 80G deduction and help you leverage the benefits of tax-saving tools like housing loans from Bajaj Finserv during the tax planning journey.
What is Section 80G Deduction?
Section 80G of the Income Tax Act allows individuals and businesses to claim deductions on donations made to approved charitable institutions and relief organizations. This provision helps taxpayers lower their taxable income and reduce their overall tax liability. However, not all donations are eligible for a full deduction. Depending on the institution or fund you donate to, there are three categories of deduction under Section 80G:
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100% deductions without any qualifying limit
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100% deductions subject to a qualifying limit
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50% deductions without any qualifying limit
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50% deductions subject to a qualifying limit
Before making a donation, ensure that the institution you’re donating to is registered under Section 80G and retains valid 80G certificates.
Steps to Claim Section 80G Deduction
When filing Income Tax Returns (ITR), follow these steps to claim deductions under Section 80G:
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Verify Eligibility of the Organization: Confirm that the charitable institution or relief fund is listed under eligible organizations recognized by the government. Donations made to political parties, for example, will not qualify for Section 80G deduction.
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Obtain Proof of Donation: Keep proper documentation, such as the receipt or certificate issued by the charitable trust, ready. The receipt must mention the name and PAN of the organization, details of your donation, and the Section 80G approval number.
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Segregate with Income Tax Slab: Your donation deduction amount depends on your income tax slab and the qualifying limits if applicable. For donations with a qualifying limit, the deduction cannot exceed 10% of your adjusted Gross Total Income.
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File Your ITR with Correct Documentation: While filing your ITR, include these deductions under “Deductions and Donations” in your form. Attach scanned proof of your donation for online submission if required.
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Donors Required to Use Cheque or Digital Transactions: Deductions are not applicable for cash contributions exceeding ₹2,000. Use cheques, drafts, or digital payment methods to claim maximum benefits.
Income Tax Slab and Its Role in Section 80G Optimization
Understanding your income tax slab is essential when calculating deductions under Section 80G. The deduction will reduce your taxable income, which ensures your tax liability is minimized. For example, if you fall under the 30% income tax slab and contribute funds eligible for 100% deduction, the impact on your taxable income and net tax payable will be significant. Ensure to factor in deductions against your income for any existing home loan interest, under other sections such as 24(b).
Tax-Saving and Financial Benefits with Bajaj Finserv Home Loan
While deductions under Section 80G can reduce your tax liability, home loan options like the Bajaj Finserv Home Loan can complement your tax-saving strategy. A Bajaj Finserv Home Loan not only helps you realize your dream of homeownership but also offers tax benefits under Sections 80C and 24(b) of the Income Tax Act.
Benefits of Bajaj Finserv Home Loan
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Affordable Interest Rates: Bajaj Finserv ensures competitive interest rates so that your home loan EMIs fit into your budget conveniently.
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High Loan Amounts: You can avail of a loan amount of up to ₹5 Crore or even higher, based on your eligibility, making it ideal for purchasing your dream home.
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Flexible Tenure: With repayment tenures going up to 30 years, you can choose an EMI structure that works for your cash flow.
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Tax Benefits: By availing a Bajaj Finserv Home Loan, you can get deductions of up to ₹1.5 lakh under Section 80C and up to ₹2 lakh under Section 24(b) for interest paid.
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Minimal Documentation: The loan approval process is hassle-free with simple documentation requirements.
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Top-Up Loan Options: With Bajaj Finserv, you can also apply for a top-up loan to meet personal or financial emergencies.
How to Apply for Bajaj Finserv Home Loan
Applying for a Bajaj Finserv Home Loan is seamless and can be completed in a few steps:
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Visit the Website: Head over to Bajaj Finserv Home Loan for detailed product information.
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Check Your Eligibility: Use the online eligibility calculator to estimate the loan amount you qualify for.
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Complete Online Form: Fill in your personal, financial, and property-related information in the online form.
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Upload Documents: Submit essential documents like identity proof, address proof, income certificate, and property papers for quick approval processing.
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Receive Approval: Upon successful verification, your loan will be sanctioned, and you’ll receive the amount in your account quickly.
Conclusion
Section 80G deduction helps you save on taxes while supporting noble causes, an act that aligns financial prudence with social contribution. You can also plan your finances efficiently by combining these deductions with benefits offered by home loans. Bajaj Finserv Home Loans, with their affordable rates, tax-saving perks, and swift approval process, stand out as a valuable financial tool for aspiring homeowners. Visit Bajaj Finserv Home Loan to take the first step towards owning your dream home while reaping additional tax benefits.
With smart planning and strategic investment in tax-saving avenues like Section 80G deductions and home loans, you can achieve financial goals more effectively and responsibly.
