The concept of giving has existed since time immemorial. It is deeply engraved in our systems that we should help one another and especially those who need support. People from all walks of life have been giving charities, be it a king, a philosopher or even common man; everyone makes contributions in some way or the other.
According to a report by McKinsey & Co, till the 19th century, India practised religious giving that was motivated by the search for salvation. Slowly at the beginning of the 20th century, philanthropy was directed towards social causes.
This slowly brought in the culture of the establishment of NGOs and foundations that worked to alleviate the suffering of people. Gradually, the number of people who donate to NGOs started increasing. People who were blessed with everything in life either chose to make in-kind donations or extend monetary support.
Not only did individuals start giving, established companies and organisations also started making corporate donations to NGOs to ensure that their money is utilised most effectively. Organisations work towards various causes like women empowerment, child education, healthcare of elderly, etc. Based on these causes, huge corporates set up charity wings or have Corporate giving as a part of their monetary funds.
Not everyone is equipped with resources to begin their foundation. This is why most of them donate to NGOs. To encourage people to come forward and help people in need, India’s laws allow certain contributions to be eligible for deduction under the Income Tax Act. Though many people contribute, they don’t realise that they have made tax deductible donations. Many people donate because it was taught to them by their parents or so that they can change the lives of people in need. But, they don’t look at the tax benefit side of it. People who donate towards philanthropy can have the satisfaction of contributing to the society and simultaneously claim the benefit of these tax deductible donations.
Benefits of making donations to a charity
By giving to a non-government organisation, you get the following benefits:
· Satisfaction of doing a good deed
· Happiness of changing lives of people
· Tax benefits of donating to a registered NGO, benefitting from 80G deductions.
Satisfaction of performing a good deed
Like someone said, true happiness stems from the joy of helping someone in need or by sharing what we have. When you help someone and see their face brighten up with a smile, it makes you happy because you are the reason they are so happy.
Happiness of changing lives of people
Every single person fights hard to survive in this world. When you give to an NGO working towards a particular cause that you connect with, you bring a positive impact on the beneficiary. For example, by providing mid-day meals to children, you ensure that they get the right nutrition for their development.
Tax benefits when you donate to NGOs
Apart from gaining satisfaction from helping someone, when you donate to a non-profit organisation, you benefit with 80g deduction under the Income Tax Act, 1961. A few organisations provide 50% tax exemption and a few offer 100% tax exemption.
One major benefit from donating to non-profit organisations is that it becomes easy to evaluate and monitor contributions. You can be assured of one thing, that even though you have done tax deductible donations, your donations will reach the person in need at the right time.
The Akshaya Patra Foundation is an NGO that is registered under Section 12A (a) of the Income Tax Act, 1961. Every donation (above ₹500) is eligible for tax exemption under section 80G. The Foundation is recognised as the world’s largest NGO-run school meal programme that serves freshly cooked nutritious mid-day meals to millions of children across the country.
Every small contribution made towards the organisation can provide nutritious mid-day meals to school children studying in Government and Government-aided schools. These meals help them tackle classroom hunger while making them healthier and sharper at performing in their academics.
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