80G for Sai Anugraha

Dear All, Greetings from Sai Anugraha! 

We are very happy to inform you that Sai Anugraha is granted with 80G on 26th April 2012. I would like to thank and congratulate each and every Sai Anugraha family member/well-wisher for the same. The amount donated towards Sai Anugraha is now eligible for deduction u/sec 80G of the Income Tax Act, 1961 vide order No. DIT(E) No.2(1220)/10-11 dtd. 26th Apr 2012. 

Please find below the process of calculating deduction amount 

A taxpayer claiming deduction under section 80G should find out the donation amount that qualifies for the deduction. He/She has to compute the actual donation with reference to the qualifying amount. 

Step 1: Find out the qualifying amount. 

The qualifying amount under this category will be lower of the the following two amounts: 

• The amount of donation 
• 10 per cent of the gross total income as reduced by all other deductions under Chapter VI-A of the Income Tax Act such as 80C (PPF, LIC etc.), 80D (mediclaim), 80CCC (pension schemes) etc. 

For example, a taxpayer named Laxmi Sharma has 

• Taxable salary of Rs 500,000. 
• He has deposited Rs 70,000 in Public Provident Fund 
• He Deposited Rs 60,000 in his company provident fund. 
• He donates Rs 45,000 to CRY (Child Relief & You) trust. 

Presuming he has no other income, his taxable income will be computed as under: 

• Gross salary Rs 500,000 
• Less: Deduction under section 80C restricted to Rs 100,000 
• Gross total income (before 80G) Rs 400,000 
• After making donation to CRY, his qualifying amount for 80G will be: Actual amount of donation Rs 45,000. 10% of Gross total income as computed above Rs 40,000, since 40,000 is lower, the qualifying amount will be Rs 40,000.

Step 2: Find out actual deduction 

The next question that arises is how much would be the actual deduction? In the case of donations to private trusts, the actual amount of donation would be 50 per cent of the qualifying amount. Therefore, in the example given above, since the donation is made to a private trust, the deduction will be 50 per cent of the qualifying amount ie 50 per cent of Rs 40,000 = Rs 20,000. So, 

• Gross total income (Before 80G) Rs 400,000 
• Less: deduction under section 80G Rs 20,000 
• Total income (taxable income) Rs 380,000

Step 3: Check upper limit 

Finally, the deduction under section 80G cannot exceed your taxable income. For example, if your income before deduction is Rs 3 lakh and if you have given donation of Rs 5 lakh to the Prime Minister’s National Relief Fund, please do not expect to claim a loss of Rs 2 lakhs. Your income will be NIL (Rs 3 lakh – Rs 3 lakh). The deduction will be restricted to the amount of your income. 

Please reach out to us to know more details about 80G. I sincerely thank each and every Sai Anugraha family member and well wisher for rendering the continuous support and helping hand. Looking forward for the same support and encouragement. 

Thanks & Regards, 

Sai Anugraha 

Shradha-Saburi 

Love All-Serve All