How To Save Tax By Donating to an NGO?

Donating to a charitable organization is a meaningful way to contribute to society and can help you save on taxes. Under Section 80G, taxpayers in India can claim deductions on the amount donated, thereby lowering their taxable income (source: incometax.gov.in, 2024).

This guide explains how donation under 80G enables you to support important causes while benefiting from tax-saving opportunities. Understanding how to donate and save tax can maximize your social contributions and financial savings.

How Does Donating to an NGO Help Save Tax?

Making a donation under Section 80G of the Income Tax Act allows you to support essential causes through an NGO and provides significant tax benefits.

Donations that qualify for a charitable donation tax deduction can be subtracted from your taxable income, reducing the amount of tax you owe. This tax-saving on donation benefit encourages more individuals to support social causes, creating a win-win situation for both the donor and the community.

Donations to Specific Causes

Certain donations, especially those directed to social and educational causes, qualify for tax deductions. Supporting specific causes, such as child welfare or healthcare, through NGOs allows you to make a tangible difference in communities that need it most. Additionally, these donations can help you avail of the NGO donation tax exemption.

Tax Deduction under Section 80G

Under Section 80G of the Income Tax Act, donations made to eligible NGOs can qualify for a tax deduction of 50% of the donated amount, encouraging individuals and corporations to support impactful social initiatives. 

To avail your tax deductions under Section 80G, it’s important to confirm that the NGO is registered under this section (80G). However, as per tax regulations, no deduction is allowed for cash donations exceeding ₹2000 (source: incometax.gov.in, 2024). Donations to CRY India, for instance, can be conveniently made through multiple channels, including digital wallets, UPI, credit/debit card points redemption, and even legacy giving. 

Social Responsibility

Supporting an NGO goes beyond financial benefits; it demonstrates a commitment to social responsibility. Through tax-exempt donations, you’re not only helping underserved communities but also aligning with responsible citizenship. CRY India uses contributions to empower children with education, healthcare, and better living conditions.

ALSO READ: Top Ways To Support NGOs and Make Difference

How to Donate to an NGO and Save Tax?

To donate and save tax, follow a simple process to ensure your donation qualifies for deductions. To make a donation under 80G, first, choose an NGO approved under this section and ensure they issue a receipt along with a valid certificate. This proof allows you to claim tax benefits, helping you save while contributing to positive social change.

Choose the NGO

When choosing an NGO to support, it’s essential to ensure that the organisation has a strong reputation, impactful initiatives, and a proven track record. Established in 1979, CRY—Child Rights and You is one of India’s most trusted and impactful NGOs. It is dedicated to creating happier, healthier childhoods for underprivileged children. With over four decades of work, CRY has transformed the lives of more than 3 million children through its 102 projects across 19 states in India.

Check NGO’s Website

Once you have chosen your NGO, visit its official website to verify that it is registered and authorised under section 80G. This step ensures that you can avail tax deductions for donations under 80G, and many NGOs, including CRY India, offer detailed information on tax exemptions and the donation process.

Choose Donation Type

Most NGOs, including CRY India, provide multiple donation options, such as one-time donations or monthly contributions. Selecting the type that aligns with your budget and preference ensures a smooth process for your charitable donation tax deduction claim.

Add Your Details

For tax deduction eligibility, ensure you provide accurate personal details, including your PAN number and address, when making a donation under 80G. This information is essential for documentation and claiming a valid donation tax deduction at the end of the fiscal year.

Why You Should Choose CRY India for Donations?

CRY India is a reputable NGO dedicated to creating sustainable change for underprivileged children. In 2023-24, CRY India’s work has impacted over 21,14,322 children, focusing on education, healthcare, and protection. Contributions made to CRY India are eligible for donation under 80G, allowing you to receive tax benefits while supporting a worthy cause.

CRY focuses on essential issues such as child education, health and nutrition, child labour, and child marriage. Choosing CRY for your donations supports these critical missions and allows you to contribute to a highly recognized and effective organization in India.

Conclusion

Donating to an NGO is a powerful way to help others while benefiting from tax exemptions. By supporting organisations like CRY India, you’re giving back and making smart financial choices. Maximize your tax savings on donations by contributing to eligible NGOs and claiming deductions under Section 80G. Remember, every contribution can make a difference and reduce your tax liabilities, making it easy to donate and save tax simultaneously.

Frequently Asked Questions

How do I know if an NGO is eligible for tax deductions?

To verify an NGO’s eligibility for tax deductions, check if it’s registered under Section 80G of the Income Tax Act. NGOs should provide an 80G certificate and receipt for your donation, confirming they meet the government’s criteria for tax-exempt status.

How do I know my donation impacts underprivileged children’s lives?

Reputable NGOs, like CRY India, provide regular updates, impact reports, and transparent financial documentation, showing how donations directly support initiatives for underprivileged children. You can check our website or request reports to see how your contribution makes a difference.

What is the minimum amount that needs to be donated to get a tax exemption?

No specific minimum amount is required to avail of a donation under 80G tax exemption for online contributions. However, we kindly request supporters to donate a minimum of ₹1000. This helps cover documentation expenses and ensures smooth processing of your contribution. Donating ₹1000 or more ensures you can benefit from tax-saving opportunities.