Dear Sir,
As per the latest budget, Sec 80G exemption would not be provided to cash donations exceeding Rs. 2000.
Would like confirmation that this is per annum per donor? Otherwise, there would people giving multiple donations of Rs. 2000 each..
Regards,
Sujatha
A very good question Sujatha. This will be very helpful to many.
S.80G of Income Tax governs donations to NGOs. Sub-section 5D basically restricted donations to Rs 10,000/- for donations made in cash. Finance Bill 2017 now restricts this to Rs 2000/-. What is the implications for NGOs in this regard. In my view this restriction basically applies to the donor (person making donation) and not the donee (NGO).
This is clear from the language of S.80G(5D) which states ‘No deduction shall be allowed under this section in respect of donation of any sum exceeding ten thousand rupees (to be replaced to two thousand, once the Finance Bill is passed and notified) unless such sum is paid by any mode other than cash.
Thus it is clear that the sub-section here is applicable to the person who wishes to make a claim under S.80G, that if donation above Rs 2000/- is made in cash it will not be allowed as a claim to the person making such claim, i.e. donor. Thus as far as NGO is concerned there is no direct implication, as long as it can prove that the donation is not anonymous.
However ultimately any restriction on the donor would also indirectly impact the NGOs ability to receive donations. The words used in 5D are ‘No deduction shall be allowed …. in respect of donation of any sum exceeding two thousand’ As till now, donations allowed as deduction to an NGO were considered upto Rs 10,000/- in a year, therefore donations in a FY should be restricted to Rs 2000/- to one NGO.
rgds
Dear Sujatha,
Please note that this limit is per annum. The scope of multiple donations is ruled out.
Thanks and regards,
B V Soma Sastry