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Donation paid in cash rs.1,00,000/-

mani muthukrishnan (Accountant) (92 Points)

11 July 2012

A private limited company has paid Rs.1,00,000/- by cash to an educational trust who is registered U/s 80 G and receipt has been duly issued.

The question arising are :

1) Can the Company claim exemption of 50% u/s 80 G ?

2) Will cash payment above 20000 rule apply and disqualify the exenditure ?

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9 Replies

CA Gaurav Choradia (Relationship Manager ) (418 Points)
Replied 11 July 2012

Yes Pvt Ltd company can claim deduction u/s 80G limit depend on the Trust.

it dosent matter how u paid the sum in cash or cheque. It is not an expenditure, it is donation which is covered u/s 80G. Cash disallwoance u/s 40A(3) covers exp. u/s 30 to 37 of B&P.
i hope it is cleared.

1 Like

CA Goutam Sharma (Chartered Accountant in Practice) (468 Points)
Replied 11 July 2012

Payment of Donation do not fall under 40A ( 3) as the same is not an expenditure as inferred from the act. Further it is also not effected by section 269ss. Hence I belive that you can enjoy the benefit of donation under section 80G

CA Bada Sanjay Kumar Reddy (CA) (69 Points)
Replied 12 July 2012

1) Till the Assessment Year 2012-13 " It can be paid either by way of Cash or Bank and shall be allowed as deduction u/s 80G subject to the conditions mentioned in the section".

There was no restriction in the mode of payment.

2) But there was a recent Amendement of section 80G vide finance Bill 2012 dated 16.03.2012,

"No deduction shall be allowed under this section in respect of donation of any sum exceeding ten thousand rupees unless such sum is paid by any mode other than cash.”.

Dhawal Mohnot (Practicing) (449 Points)
Replied 12 July 2012

Agree with Mr.Sanjay Kumar Reddy.

CA Romil Shah (CA ) (669 Points)
Replied 12 July 2012

DONATION PAID IN CASH WOULD BE ALLOWED UNDER 80G PROVIDED THAT DONATION AMOUNT DOES NOT EXCEEDS RS. 10000.

Nitesh ujjwal (ARTICLE ASSISTANT) (41 Points)
Replied 12 July 2012

Dear Sanjay reddy sir you are right about the amendment but it will be applicalbe from 01/04/2013 means AY 2014-15.
For the current FY 2012-2013 or AY 2013-14 there is no restriction on donation.