We are all
aware of income tax and we are also aware that it is our fundamental duty to
pay taxes on time every year. Taxes are applicable for all salaried and
self-employed individuals earning above a certain income level. Additionally,
businesses also need to declare their income and profit based on which the tax
slab is decided for them. The taxes we pay are utilised by the government for
developmental and security purposes such as constructing hospitals, schools,
welfare centres, roads, maintenance of defence forces and the like. However,
the Government has also made the provision of tax deductions for the
welfare of the taxpayers.
Applicability
of tax deduction
The Government of India has made a provision under the Income Tax Act
that relaxes the taxable amount of those who have made investment for the welfare of the self or the society. For instance,
with regards to welfare of the self, if you are paying for house rent or children education; or you
have invested on housing loan or medical insurance, you can avail tax deductions on your taxable
income. Similarly, with regards to welfare of the society, is you contribute
donations to registered non-governmental organizations in India, you can avail
tax benefits under Section 80G of the Income Tax Act.
Charity – the noblest way to save tax
Investing on personal progress is a must, but at the same time, we must
also look beyond ourselves. As citizens, it is our responsibility to contribute
towards the upliftment and development of the country. Hence, as a means to
encourage people to get involved with charitable organisations, the Government
has made the provision of tax exemption
donation.
Funds and fundraising are an important aspect of an NGOs operations and
your contribution supports non-governmental organisations in India to
make progresses in their respective fields of work. This in turn brings about a
desirable and sustainable change in the society.
For
instance, if you relate to women empowerment, you can choose any of the NGOs
working in this field. Similarly, if you strongly identify with health and
education of children, you can support child-centric NGOs such as The Akshaya
Patra Foundation that provides free school meals to more than 1.8 million
children on each school day across 12 States and 2 Union Territories of India.
When you donate to registered non-governmental
organisations in India, you may either get 100% or 50% exemption on the donated amount
based on a pre-decided slab and criterions
set by the Income Tax Act depending on the type of NGO and its cause.
Your support to any charitable causes makes you a part of the
solution for several critical issues obstructing the progress of the society.
Your choice of NGO could be any but your support potentially transforms the
entire ecosystem of the society for the better along with making you eligible
for tax exemption donation.
In conclusion, as you invest for yourself, take a
moment to act for the society too of which you are an integral part!
Disclaimer: Each of the above-mentioned tax exemption plans/investments has its own terms and conditions. Hence, it is advised to understand the respective tax exemption clauses prior to making an investment or a claim.
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