Income Tax: How to claim a deduction under Section 80G for donations made to Ayodhya Ram Mandir Trust?

Details of donations to Ayodhya Ram Mandir Trust

Individuals who have contributed to the Ayodhya Ram Mandir Trust, officially known as the “Shri Ram Janmabhoomi Teerth Kshetra Trust”, or those intending to make donations in the near future, are eligible to avail of a deduction under Section 80G of the Income Tax Act, 1961.

Here is how you may avail of a tax deduction under Section 80G for your contribution to the Ayodhya Ram Mandir Trust. Before you proceed with claiming a tax deduction, familiarize yourself with the types of donations that are eligible for tax exemption under the Act.

• Donation criteria: Deductions are applicable only for contributions directed towards the renovation or repair of the temple. Donations for purposes such as darshan, prasad, etc., are not eligible for deduction.
• Donation method: Cash contributions exceeding ₹2,000 are ineligible. Please donate using methods such as cheque, DD, online transfer, or through the official website. Deductions apply only to contributions made in cash, by cheque, demand draft (DD), online transfers through National Electronic Fund Transfer (NEFT), Immediate Payment System (IMPS), and via Unified Payment Interface (BHIM, Google Pay, Paytm, PhonePe, etc.). Contributions in kind, such as bullion, jewellery, or any other non-monetary form, even though they hold monetary value, do not qualify for deduction under the Income Tax Act.
• Tax structure: Only claim deductions if you opt for the old tax regime when filing your Income Tax Return (ITR).

Deduction on donations to Ayodhya Ram Mandir Trust

Can you claim a deduction on the entire donation amount to Shri Ram Janmabhoomi Teerth Kshetra Trust, Ayodhya?

To start with, contributions to the Shri Ram Janmabhoomi Teerth Kshetra Trust for the Ayodhya Ram Temple construction qualify for a 50 per cent deduction under Section 80G of the Income Tax Act, 1961. This implies that for a donation of ₹20,000, you can assert a deduction of ₹10,000 from your taxable income.

Priyadarshini Moreshwar Mulye, a SEBI-registered Investment Advisor and Founder, ARTHA FinPlan, shared, “Donations to Shri Ram Janmabhoomi Teerth Kshetra Trust are eligible for tax deductions under Section 80G 2(b) starting from FY 2020-21.”

Other notable points about the tax deduction include:

• The minimum qualifying donation amount for this deduction is ₹10.
• Contributions must be made via the official website of the Shri Ram Janmabhoomi Teerth Kshetra Trust or other channels authorized by the Trust.
• A donation receipt issued by the Trust is a prerequisite for claiming the deduction.
• The deduction applies exclusively to individual taxpayers and does not extend to corporates or businesses.

The maximum deduction you can claim is limited to 10 per cent of your adjusted gross total income for the respective fiscal year. Nevertheless, it is essential to determine the adjusted gross total income initially. Initially, the gross total income comprises earnings from various sources, such as salary, business, interest, rent, capital gains, etc., before any deductions are considered. It’s important to note that certain types of income, like long-term capital gains, are taxed at rates distinct from regular income and are not subtracted from the gross total income when calculating the adjusted gross total income.

Deductions can be availed through Sections 80C to 80U for various expenditures, including investments, insurance premiums, medical expenses, educational costs, and more. These deductions are subtracted from the gross total income to determine your adjusted gross income. The adjusted gross total income is computed by subtracting deductions under Chapter VI A (excluding 80G) and income subject to special tax rates from the gross total income. This implies that you are eligible to claim a deduction of 50 per cent of the donated amount to the Ram Mandir Trust, capped at a maximum of 10 per cent of your adjusted gross total income.

Hiren Thakkar, Proprietor, Hiren S Thakkar & Associates Chartered Accountants added, “As per the new tax regime, all donations made under section 80G are disallowed for deduction. However, if you are opting for the old regime, you can claim 50% of the donated amount as a deduction, subject to the condition that donations are made through means other than cash. For cash donations, the maximum allowable limit is ₹2000.”

Documentation needed to avail of deduction under Section 80G

To avail of the deduction under Section 80G for donations made to the Ram Mandir Trust, you are required to provide the following documents:

• Donation receipt: This document holds utmost importance as it acts as evidence of your donation to the Trust. The receipt must be provided by the Shri Ram Janmabhoomi Teerth Kshetra Trust and should include the following details:

1. Your name and address
2. Date of donation
3. Amount donated (in words and figures)
4. Mode of payment (cash, cheque, online transfer)
5. PAN of the Trust
6. Registration number of the Trust under Section 80G
7. Specific mention that the donation is meant for the renovation/repair of the Ram Mandir

• Proof of payment: Additional documentation may be required depending on the chosen mode of payment.

1. Additional evidence is unnecessary unless the amount surpasses ₹2,000. In such instances, it is advisable to include a copy of the PAN Card.
2. A copy of the cancelled cheque or a bank statement that reflects the transaction should also be enclosed.

• ITR Form: When completing your Income Tax Return (ITR), you are required to furnish donation details in the specified schedule, typically Schedule 80G. This information encompasses details such as the Trust’s name, PAN, donated amount, and the claimed amount.

Deduction benefits available under the old tax regime

In the context of seeking deductions and exemptions under the Income Tax Act in India, choosing the old tax regime provides notably more advantages compared to the new tax regime. Important deductions, such as those under Chapter VI A (80C to 80U) and Section 80G, including the deduction for donations to the Ram Mandir Trust, are not accessible under the new tax regime. This implies that taxpayers who wish to benefit from deduction advantages for their contributions must adhere to the old tax regime.

Milestone Alert!
Livemint tops charts as the fastest growing news website in the world 🌏 Click here to know more.

Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it’s all here, just a click away! Login Now!

Published: 30 Jan 2024, 03:40 PM IST