REMOVAL OF VALIDITY PERIOD
The limitation imposed on the validity of approvals 80G(5) of the Income-tax Act, 1961 was always an unwanted thing by any institution registered under this Act. The approved institutions had to bear the hardship of getting their approvals renewed from time to time. This was unduly burdensome for the bona fide institutions and also lead to wastage of time and resources of the tax administration in renewing such approvals in a routine manner.
Finally, after a long-awaited period, the requirement of periodical renewal or approval under section 80G was dispensed with w.e.f. 01-10-2009. Any institution whose approval expires prior to 01-10-2009 has to apply once for renewal of its approval. Any institution applying for fresh registration or renewal of its existing registration on or after 01-10-2009 has to apply only once for fresh registration or renewal of its existing registration. The approval granted in both the cases will continue to be valid in perpetuity unless withdrawn.
For the removal of doubts about the validity of registration u/s 80G(5) of the Income-tax Act, 1961, Central Board of Direct Taxes vide its Circular 7/2010 Dtd. 27-10-2010 clarified the following :-
In light of the amendment brought by Finance (No.2)Act,2009 it has been clarified that for the purposes of section 80G(5), existing approvals expiring on or after 1st October, 2009 shall be deemed to have been extended in perpetuity unless specifically withdrawn. Further, any approval under section 80G(5) on or after 1-10-2009 would be a one time approval which would be valid till it is withdrawn.
LIMITATION OF CASH DONATION
A new sub-section (5D) to Section 80G has been inserted by Finance Bill 2012 where no deduction shall be allowed under this section in respect of donation of any sum exceeding Rs. 10,000/- unless such sum is paid by any mode other than cash. These amendments will take effect from 1st April, 2013 and will, accordingly, apply in relation to Assessment year 2013-14 and subsequent assessment years.
QUALIFYING LIMIT
The qualifying limits u/s 80G is 10% of the adjusted gross total income. The limit is to be applied to the adjusted gross total income. The ‘adjusted gross total income’ for this purpose is the gross total income (i.e. the sub total of income under various heads) reduced by the following:
- Amount deductible under Sections 80CCC to 80U (but not Section 80G)
- Exempt income
- Long-term capital gains
- Income referred to in Sections 115A, 115AB, 115AC, 115AD and 115D, relating to non-residents and foreign companies.
POINTS TO BE CONSIDERED
For claiming deduction under Section 80G, a receipt issued by the recipient institution is a must. The receipt must contain the name, address & PAN of the Institution, the name of the donor, the amount donated (Amount written in words and figures should tally). The most important requirement is the registration number issued by the Income Tax Department under Section 80G which must also be printed on the receipt along with its validity period of registration. The donor should always insist on a photocopy of the 80G certificate in addition to the receipt.
