Tax deduction 80g benefit

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This discussion explores whether Mrs. A can claim an 80G tax deduction for a donation made to an NGO through her sister, Mrs. B. Generally, the deduction is only possible if the NGO issues the receipt in Mrs. A's name. While Mrs. B could donate the money on Mrs. A's behalf, proving the source of funds, especially with cash transactions over £20,000, can be problematic and may lead to disallowance by tax authorities. It's recommended to use banking channels for clarity and proof of payment.

Nanu Gupta

Nanu Gupta (Querist)
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29 May 2024 Mrs A wants to transfer a sum of rs 1.5 lakh to her sister Mrs B's account. And then Mrs A wants Mrs B to donate the amount to an NGO. Will mrs A get the benefit of 80g in this case?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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29 May 2024 As such no; unless the NGO issues receipt in the name of Mrs. A.

Nanu Gupta

Nanu Gupta (Querist)
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30 May 2024 So if payment is done from mrs B's account and receipt is issued in the name of Mrs A then Mrs A can claim the deduction?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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30 May 2024 Yes, as the NGO will declare Mrs. A as donor in all its records. While Mrs. A would report that the amount paid by her through Mrs. B.

Nanu Gupta

Nanu Gupta (Querist)
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30 May 2024 Mrs A is paying this amount to mrs B in cash. They are sisters. So how she will prove/report that this is her amount of money?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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30 May 2024 Cash transaction above Rs. 20K will not be accepted. So, in case of any query, ITO may disallow the deduction. Better to pay it by banking channels.

Nanu Gupta

Nanu Gupta (Querist)
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30 May 2024 But the transaction is between sisters. Doesn't it fall under relative?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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30 May 2024 To get deduction the donor should have payment proof.

Nanu Gupta

Nanu Gupta (Querist)
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30 May 2024 Mrs A is paying cash to Mrs B rs 1.5lac. Mrs B will deposit the same in her bank account and then she will donate it in the name of Mrs A through bank channel. Will this help get the deduction for Mrs A?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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31 May 2024 In case of any query, ITD will consider the payment by Mrs. B and not by Mrs. A.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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05 September 2024 Good Luck.

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