Supporting Charities Through Donation and Saving Taxes
Monday | 13th May 2024
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Charities, which are organisations that help people, animals or communities in need, undertake actions that align with specific developmental causes and goals. Most charities run entirely on donations from caring individuals, families and businesses. This means that gifts of money, goods, services, or volunteering are crucial to charities to keep doing their important work in communities around the world. Of these, donated financial support is the only resource that generates a win-win reward. It ensures continuity of developmental support to people and communities that need it, as well as an exemption for income tax. Therefore, it is important to see charity as a win-win opportunity, rather than as a unilateral ‘giving away’ of money.
What is donation money used for?
Some charities are huge organisations staffed by thousands of employees and volunteers, while others are just a handful of dedicated people. Some focus their efforts in a single town or region, while others have a global footprint and impact. Irrespective of their speed and scale, they all depend on people like us for opening our hearts and wallets to donate what we can to advance their missions. In India and across many other countries, exemption for income tax is used as a tool to support their work.
This funding goes towards a variety of interventions. From providing food, shelter and support services, to protecting and cleaning habitats, funding medical research, buying medical equipment, caring for the sick and ensuring preventative care to those in need, charity has a significant role to play in society. Educational charities help children access schooling, books, learning programmes and more. No matter what issues you care most about, charities are targeting those exact areas with support, guidance, and infrastructure, and merit being supported by NGO donation tax exemption.
Why is a donation for tax exemption provided?
Upon making a monetary donation, the government of India allow donors to reduce their taxable income. This can be called, in everyday terms, a donation tax exemption. One can look at it in this way: Since you have already done your part in supporting a relevant cause via donation, you must be incentivised for this act. This, therefore, encourages more charitable giving from people and businesses by providing some built-in savings as a reward. The more you donate to qualified charities within certain limits, the more you can reduce your overall tax burden. As mentioned earlier, charities receive the funds that are crucial to keep their projects running, and you get to support causes you believe in while lowering your tax obligation- a real win-win. A donation for tax exemption is a proven way to increase donations to non-profit organisations doing important work in communities around the country.
Why does donation tax exemptionreally matter?
For an NGO, donation tax exemption adds a greater degree of certainty to financial support. It Inspires people to give generously to causes that they are anyway wanting to support. Over time, small donations from individuals, families and companies every year add up to a game-changing amount that can catalyse significant change and trigger momentum towards development.
And, over time, the transformation triggered in communities eventually goes towards making them hard-working, earning and tax-paying citizens of the country, creating a beneficial cycle of change. Every rupee donated, therefore, not only changes someone’s life but eventually, in one way or another, goes towards the larger mission of nation-building. Not to mention that lower taxable income also allows people to spend more, catalysing consumption and mobilising the circulation of money in the economy.
Therefore, NGO donation tax exemption has four distinct benefits. Firstly, it provides real, meaningful support to important causes you care about. Secondly, it offers a generous tax exemption that reduces your total taxable income. Thirdly, it frees up more of your own money to spend on needs, wants, goals and passions. Fourth, it allows people to experience the feeling of generosity, community impact and citizenship.
Bal Raksha Bharat (Save the Children India) uses donations to support various initiatives aimed at improving the lives of children in India. The donations are directed towards reducing child mortality and stunting, combating child labour, and aiding children in crises. Funds also help provide health and nutrition benefits to marginalised communities, education to help children start and stay in school, and protection from harm and violence.
“ I Lead Strategic Communication & Government Relations at Bal Raksha Bharat. Based in New Delhi, I oversee Media Relations, Communication and foster relationships with government entities to promote the welfare of children. I have a strong background in public affairs and have successfully collaborated with multiple stakeholders, including NGOs and corporate partners."
