Monetary donations given to help flood victims in Kerala will entail tax benefits under Section 80G of the Income Tax Act, 1961. However, one must donate through registered aid agencies, or preferably, to the Chief Minister’s Distress Relief Fund. In fact, donations made to Chief Minister’s Distress Relief Fund and Prime Minister’s National Relief Fund by individuals, trusts and organisation will get 100% exemption as per income tax rule under Section 80G(2)(iii hf).
Full tax exemption for donations to CMDRF and PMNRF
The Chief Minister’s Distress Relief Fund (CMDRF) is an emergency assistance fund to provide relief to families and individuals affected by floods, loss of life due to accidents and chronic diseases, etc. Payment receipt and Section 80G(2) certificate will be issued for every successful payment through portal https://donation.cmdrf.kerala.gov.in and receipts for other payments like cheque, draft, RTGS, NEFT and and UPI will be issued later and the transaction details must be kept.
The CMDRF accepts online contribution. You can click the donate menu and fill the online donation form. It will lead you to the payment gateway where you can pay through net banking, credit and debit cards. During August 14-26, the CMDRF received Rs 676.61 crore as donations (electronic payment through portal Rs 129.17 crore; UPI/QR/VPA Rs 43.21 crore and cash/cheque/RTGS Rs 504.23 crore).
Even contributions made to the Prime Minister’s National Relief Fund (PMNRF) by individuals, organisations and trusts get 100% tax exemption. For 80(G) income tax receipts, donors will have to provide the transaction details of donations deposited directly in any of the PMNRF collection banks along with the address through e-mail at firstname.lastname@example.org.
However, monetary contributions made to registered non-government organisations (NGOs) for Kerala flood victims will get only 50% exemption. The doner must ensure that the registration certificate issued to the NGO has not been revoked by the government. Donation in kind, such as clothes, blankets, food, medicines and other things of utility are not eligible for claiming tax benefit under Section 80G of the Act.
Donations — Section 80G
Donations to trusts, charitable institutions and approved educational institutions entail tax exemption. Donations eligible for tax exemptions include the National Defence Fund, Prime Minister Drought Relief Fund, National Foundation for Communal Harmony, National Children’s Fund, Prime Minister’s National Relief Fund, etc. The amount will be deducted from the gross total income before arriving at taxable income.
Donations made to Swachh Bharat Kosh and Clean Ganga Fund also qualify for full deduction from the total income. Also, 100% deduction is given for donations made to National Fund for Control of Drug Abuse. Any monetary contribution to any political party or electoral trust is eligible for tax exemption. To get exemption, one should not pay in cash for over Rs 10,000.
To avail tax benefit, the documents showing the donation made, such as receipts or tax certificates must be kept carefully. The receipt must include details such as name and address of the trust, name of the donor, amount donated mentioned in both words and figures, registration number of the trust as given by the income tax department under Section 80G, along with its validity period. In case of any clarification from the tax department, such documents will be important and have to be shown to tax officials.