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Tax exemption benefit under 80G 12A

Others 361 views 1 replies

If tax payer need to pay 1 lakh rs of tax, and if he donated Rs.50000 for any trust to avail tax benefit under 80G then he get Rs. 25000 of exemption it means he still needs to pay Rs. 75000 but he already spent 25000 it means he spend total Rs.1 Lakh, then what is benefit of donation? Why he should donate?

 

Replies (1)
First of all deductions under Chap Vl A are allowed to be deducted from Gross total income then tax liability is calculated on such net income.
That means suppose if ur GTI is Rs 10 lakhs and Rs 25000 is allowed as deduction u/s 80 G then it helps reducing tax liability on directly Rs 25000.

Coming to your question..
Deduction amount will not reduce directly your tax liability from Rs 1 lakh but will reduce that gross income on which 1 lac tax is calculated.


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