Mr Gupta donated * 1,00,000 to a trust on the condition that interest earned will be used for
awarding 3 scholarships of equal value every year. If donation earns 12% per annum, find the
value of each scholarship.
Answers
Step-by-step explanation:
made to social causes, there is a huge gap between the demand of money from the needy and the amount donated by philanthropists. This probably, is the reason why the Government has given tax benefits on donations. The amount donated towards charity attracts deduction under section 80G of the Income Tax Act, 1961. Section 80G has been in the law book since financial year 1967-68 and it seems it’s here to stay. Several deductions have been swept away but the tax sop for donations appears to have survived the axe. The main features of tax benefit with respect to charity under section 80G are as follows:
Page Contents
1. Deduction U/s. 80G is Allowable to all kind of Assessee
2. Deduction U/s. 80G on Donation to Foreign Trust
3. Deduction U/s. 80G on Donation to Political Parties
4. Only donation made to prescribed funds and institutions qualify for section 80G deduction
5. Maximum allowable deduction under section 80G
6. Documentation Required for Claiming deduction U/s. 80G
7. Only donations in cash/cheque are eligible for the tax deduction under section 80G
8. Deduction U/s. 80G on Donation made by NRI
9. Deduction under section if donation deducted from Salary and donation receipt certificate is on the name of employer
10. Limit on donation amount under section 80G
11. Deduction amount U/s. 80G
a. Donations with 100% deduction under section 80G without any qualifying limit:
b. Donations with 50% deduction under section 80G without any qualifying limit.
c. Donations to the following are eligible for 100% deduction subject to 10% of adjusted gross total income
d. Donations to the following are eligible for 50% deduction under section 80G subject to 10% of adjusted gross total income
12. Qualifying Limit for deduction under section 80G
13. Eligible Donation for deduction U/s. 80G
14. Tax benefit under section 80G depends on rate of Tax applicable to the Assessee
15. ILLUSTRATION OF BENEFITS UNDER SECTION 80G
i) Donations to private trusts
ii) Donations to trusts/funds set up by the Government
1. Deduction U/s. 80G is Allowable to all kind of Assessee
Any person or ‘assessee’ who makes an eligible donation is entitled to get tax deduction under section 80G subject to conditions. Section 80G does not restrict the deduction to individuals, companies or any specific category of taxpayer.
2. Deduction U/s. 80G on Donation to Foreign Trust
Donations made to foreign trusts do not qualify for deduction under section 80G.
3. Deduction U/s. 80G
Value of each scholarship= $4000
Hope this helps
