Deduction in case of certain donation Section 80GGA
Deduction is allowed to all the assessees except the assessees whose gross total income includes income which is chargeable under the head "Profits and gains of business or profession". (because such assesses is allowed to debit the amount to profit and loss account of business/profession)
Deduction is allowed in case of donation or contributions to any of the below mentioned institutions. Deduction allowed is equal to the amount of donations.
(i) Donation given to an institution notified under section 35 for scientific research / research in social science or statistical research.
(ii) Donation given to an institution notified under section 35AC for eligible project i.e. the projects of social or economic importance like construction of houses for the poor person or taking up drinking water project or other similar projects.
(iii) Donation given to an institution notified under section 35CCA for rural development including donation to Rural Development Fund setup by central Government or donation to National Urban Poverty Eradication Fund.
No deduction shall be allowed under this section in respect of any sum exceeding ten thousand rupees unless such sum is paid by any mode other than cash.
(i) Mr. X has donated Rs.2,00,000 by cheque to an institution notified under section 35AC for eligible projects and Mr. X do not have any business/profession, in this case he will be allowed deduction under section 80GGA for Rs.2,00,000 but if he has business/profession, he will not be allowed deduction under section 80GGA rather he will be allowed to debit the amount to profit and loss account.
(ii) ABC Ltd. has donated Rs.2,00,000 by cheque to an institution notified under section 35CCA for rural development and company has business/profession, in this case deduction under section 80GGA is not allowed but company can debit the amount to profit and loss account.
Watch Demo for CA/CMA Inter for Taxation by Prof. Vinit Sir:https://www.conceptonlineclasses.com/demovideos
Visit Website: https://www.conceptonlineclasses.com/