CBDT allows deduction under section 80G for donation to The Somnath Temple managed by Shree Somnath Trust: CBDT has issued a Notification No. 29/2022 dated 11.04.2022 to notify The Somnath Temple managed by Shree Somnath Trust as a historic importance and a place of public worship of renown for the purposes of section 80G(2)(b). The Permanent Account Number (PAN) of The Somnath Temple is AAATS9555Q.
Section 80G allows a deduction for donation made to certain funds and charitable institutions from the gross total income before arriving at the total income of an assessee.
Since The Somnath Temple is notified under section 80G(2)(b), the deduction shall be limited to 10 per cent of the adjusted gross total income of the assessee. The deduction shall be 50 per cent of the amount of donation to The Somnath Temple, subject to 10 per cent of the adjusted gross total income of the assessee. The limit of deduction amount is, however, subject to gross total income. In other words, the deduction under section 80G cannot exceed the gross total income of the assessee.
What is Adjusted Gross Total Income? How to Compute Adjusted Gross Total Income for computing deduction under section 80G?
The Act does not use the term ‘Adjusted Gross Total Income’. This term is used by the author to clarify the concept aptly. Actually, it is nothing but the Gross Total Income computed for all the heads of income and as reduced by the followings-
(i) Any Long term capital gains, if any, included in the Gross Total Income,
(ii) Short Term Capital Gains chargeable u/s 111A, if any, if any, included in the Gross Total Income
(iii) All exempt income (From FY 2020-21, dividend income has been made taxable subsequent to abolishment of Dividend Distribution Tax or DDT u/s 115-O)
(iv) All permissible deduction under section 80CCC to 80U except deduction under this section 80G
(iv) Income referred to in sections 115A, 115AB, 115AC or 115 AD (related to non-residents/foreign company)
Read more on Income Tax Deductions here.
In other words, the Adjusted Gross Total Income is computed as below-
Illustration 1: Mr. Rakesh is a salaried individual. During FY 2021-22, his income from the salary is Rs. 4,00,000. His interest income from bank fixed deposits for the year is Rs. 5,000. He is eligible for deduction u/s 80C for Rs. 1,50,000. He has donated Rs. 10,000 to Maa Umiya Temple managed by Vishv Umiya Foundation.
Compute the amount of deduction under section 80G and the Total Income.
Working Note 1:
With the introduction of the new tax regime under the provisions of section 115BAC, no deduction including a deduction under section 80G can be claimed. Hence, if an individual opts for the new tax regime, no deduction for donation under section 80G can be claimed. However, this provision was applicable from the financial year 2020-21 (AY 2021-22). The deduction under section 80G for donation to The Somnath Temple shall be available only if the assessee opts for the old tax regime.
Similarly, a domestic company which opted to pay concessional rate of tax under section 115BAA and section 115BAB is allowed to claim deduction under section 80G by the Finance Act, 2020. This was applicable for FY 2019-20 (or AY 2020-21). Form AY 2021-22, such a company cannot claim deduction under section 80G as per amendment by Finance Act, 2020.
Deduction for donation u/s 80G to be allowed based on online data/Donation Certificate
It should be kept in mind that there is an amendment brought in by the Finance Act, 2020 which provides for allowability of deduction u/s 80G based on the online amount of donation in Form 26AS which will be furnished by the Trust to the income tax department.
Any Trust or NGO approved under section 80G has to comply with two new compliances from the FY 2021-22:
I. Mandatory furnishing of statement of donations (Donation Returns)
II. Issue of donation certificates to each donor
Section 80G(5)(viii) requires the furnishing of a statement of donation received by an approved trust or an NGO or an institution from each donor.
Section 80G(5)(ix) requires the issue of donation certificates to each of the donors for claiming deduction from the gross total income.
Clauses (viii) and (ix) of section 80G(5) were initially introduced by the Finance Act, 2020 but deferred to 1-4-2021 due to the outbreak of COVID-19 pandemic. Later on, vide the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020, the provisions were reintroduced in the statute with effect from 1-4-2021.
CBDT in its Notification No. 19/2021 dated 26.03.2021 has laid down the procedure for furnishing the particulars of donation in Form 10BD and issuing of a donation certificate to each donor in Form No. 10BE which shall be mandatory for all the Trusts, NGOs, and other organisations approved u/s 80G(5)(viii) and u/s 80G(5)(ix) respectively of the Income Tax Act, 1961. For this purpose, Rule 18AB is inserted in the Income Tax Rules, 1962 by the Income-tax (Sixth Amendment) Rules, 2021, w.e.f. 1-4-2021.
Read also: Statement of Donation in Form No. 10BD and Certificate of Donation in Form 10BE
Read the full text of the Notification No. 29/2021 dated 11.04.2022
MINISTRY OF FINANCE
(Department of Revenue)
(CENTRAL BOARD OF DIRECT TAXES)
NOTIFICATION
New Delhi, the 11th April, 2022
INCOME-TAX
S.O. 1770(E).—In the exercise of the powers conferred by clause (b) of sub-section (2) of section 80G of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby notifies “The Somnath Temple managed by Shree Somnath Trust (PAN: AAATS9555Q)” to be place of historic importance and a place of public worship of renown for the purposes of the said section.
[Notification No. 29/2022/F. No.176/2/2022-ITA-I]
SOURABH JAIN, Under Secy.
Download CBDT Notification No. 29/2022 dated 11.04.2022 in pdf format.
Also Read:
Donation to PM CARES FUND and CM Relief Fund qualifies for CSR Expenditure amid COVID-19
Section 80G deduction for Donation to West Bengal State Emergency Relief Fund
Deduction for Collective Donation under section 80G to Employees through Employer
Deduction under section 80G for Donation to PM CARES Fund
Donation to PM CARES Fund to fight COVID-19
CBDT allows deduction under section 80G for donation to Shri Ram Janmabhoomi Teerth Kshetra
0 Comments