As a financially able Muslim, you will be giving the Islamic charities of Zakat and Fitra. These donations can be given to individuals like your relatives or neighbourhood and you are obliged to give them preference by religion.
Additionally in case you are giving financial assistance to registered Madrasas and Islamic Trust or other NGO's you maybe eligible for I.T. deductions.
Note: For this the receiver has to be registered with I.T. Office and not just registration with any other government body. Sadly most Madrasa are registered with Government but not registered with I.T. Office and hence you cannot claim the deductions.
In India under Income Tax laws (Section 80G), you are eligible for tax deduction for your donation albeit several conditions. Maybe if you meet all the conditions than you might save tax for few thousand rupees:
- Donations of cash only and not in kind.
- If by cash, maximum deduction allowed is for Rs. 10,000 donation. Else the limit is higher for cheque/ draft/ electronic payment.
- PAN of the donee is the most important thing needed.
- Restrictions on the donations:
- Organizations specified by the government (allowing 100% or 50% deduction)
- 50% deduction for social welfare/ minority welfare and religious trusts.
Example: You have taxable income exceeding the basic slab. Say Rs. 4.5 lakhs.
So tax on Rs. 2 lakhs @ 10% = Rs. 20,000 as tax
Suppose you pay zakat/ sadaqa of Rs 30,000. How much tax you will save?
50% of 30,000 = 15,000.
Tax is @ 10%. So tax saved is 10% of Rs. 15,000 = Rs. 1,500
In case your employer ask you upfront about it. You can declare the same and submit the proofs.
Else you can claim refund at the time of returns filing:
- In your ITR form, the last tab/ section is 80G and it is here where you have to add your details.
- In that there are 4 subsections: Goto Section "D. Donations entitled for 50% deduction with qualifying limits".
- Enter all the required details. As I mentioned earlier the most important thing is the PAN of the organization.
- Attach the receipts of your donation and then post the form. Keep a copy of the same.
That's it, now you can get back refund for the same.
Muskan is the platform for all those peoples who want to give their participation for the development of the society. And for this purpose, Muskan invites people to support as the way they want. You can either be the volunteer or you can send the monetary support or you can even give the materialistic as well. What all you need to do is just call Muskan 9953659128.
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I am not sure if madarsa has their PAN so what to do when I have made donation to the same??
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