The 80G Certificate is one granted to the non-profit organizations by the Income Tax department. This is a genuine way to avail the tax deduction on the basis of charity and donations to such organizations. It is a well-planned way to avail such provisions. The Income Tax Department is involved in the intensive scrutiny during the entire procedure. The main objective of the 80G Certificate is to encourage the donors to donate in such funds and organizations. This would provide tax exemption to the donors.
Exemption under section 80G gives rebate to a donor on the amount he donates to an organization that has 80G certificate. If the public charitable organization (NGO) has 80G certificate then the donors of that organization would not need to pay tax on the 50% of the donated amount. Income tax department issues 80G certificate only for a specific period (usually 1-3 years). After expiry, 80G exemption must be reapplied for and renewed.
80G is a certificate that exempts you part or fully from paying taxes, if you have made donations to charitable trusts or section 8 company or organizations that are registered to offer you exemptions from taxes. For e.g. A charitable organization or trust registered under section 12 A, allows you to avail tax exemption under section 80G. There is however a maximum allowable deduction criteria. The criterion is if the aggregate of the amount you donate exceeds 10% of the total gross income, then the excess amount will not qualify for tax benefit. 80G certificates made its way into law book in the year 1967-68 and it continues to be an important tax saving certificate.