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May 9, 2020

Contribution to Shri Ram Janmabhoomi Teerth Kshetra eligible for 80G Deduction

Contribution to to Shri Ram Janmabhoomi Teerth Kshetra eligible for 80G Deduction

Shri Ram Janmabhoomi Teerth Kshetra is a trust set up to construct a Ram temple in Ayodhya, Uttar Pradesh by the Government of India. The trust has 15 trusteesIt was created as per the verdict of the Supreme Court of India. Prime Minister Narendra Modi personally announced the trust’s formation in The Lok Sabha on 5 February 2020.

The Income Tax Department has issued Below Notification No 24/2020F dated 8 May 2020, allowing tax exemption to donations under Section 80 G of the Income Tax Act

In the exercise of the powers conferred by clause (b) of sub section (2) of section 80G of the Income tax act, 1961 (43 of 1961), the Central Government hereby notifies “SHRI RAM JANMABHOOMI TERTH KSHETRA” (PAN AAZTS619B) to be place of historic importance and a place worship of renown for the purpose of the said section from the year F.Y. 2020-21, relevant to the Assessment Year 2021-22.

What is Section 80G donation / deduction in Income Tax

Contributions made to certain funds and charitable institutions can be claimed as a deduction under Section 80G of the Income Tax Act, while computing your total Income. The Trust should be notified by Income Tax Department or shall have 80G certificate. This deduction can be claimed by any taxpayer – individuals, company, firm or any other person.

What is Shri Ram Janmbhoomi Teerth Kshetra Trust?

Shri Ram Janmbhoomi Teerth Kshetra has been registered with its registered office at R-20, Greater Kailash Part -1, New Delhi, 110048. It was given the 2.77 acre (previously disputed) land as well as the 67.703 acre land acquired under the Acquisition of Certain Area at Ayodhya Act, 1993

Shri Ram Janmabhoomi Teerth Kshetra was set up as a trust for the purpose of the construction of the temple, following the Supreme Court decision in the Ram Janmabhoomi-Babri Masjid case.

What is PAN number of Shri Ram Janmbhoomi Teerth Kshetra Trust

PAN AAZTS619B

From which year you can claim donation?

You can claim donation for FY 2020-21 as per the Notification. The government has extended deadline to for calming deduction for FY 2019-20 till 30 June. However the Notification says its applicable from FY 2020-21, relevant to the Assessment Year 2021-22, so as per interpretation it should be applicable from FY 2020-21

How much donation made to Shri Ram Janmbhoomi Teerth Kshetra Trust can be claimed as deduction in 80G

The Notification says exemption as per clause (b) of sub section (2) of section 80G which is for any sums paid by the assessee in the previous year as donations for the renovation or repair of any such temple, mosque, gurdwara, church or other place as is notified by the Central Government in the Official Gazette to be of historic, archaeological or artistic importance or to be a place of public worship of renown throughout any State or States

As per the said Notification, 50%% of donations made by taxpayers to this trust would be allowed as deduction while computing their taxable income, subject to maximum limit of 10% of their adjusted gross total income

For example if your Gross Total Income is Rs 10 Lakh, you will get 100% deduction upto Rs 1 Lakh contribution or donation made

How to calculate Adjusted Gross Total Income?

Gross Adjusted income for this purpose is calculated as Gross Total Income minus (i) all exempted incomes, (ii) long-term capital gains and, (iii) all deductions under section 80C to 80U except for 80G.

Example

The said donation to comes under “SHRI RAM JANMABHOOMI TERTH KSHETRA” comes under 50% limited category i.e. the assessee will get 50% deduction of the amount of donation made to the following entity subject to qualifying limit. In case limited category donation shall be restricted as follows:

  • Total donation                                                XXX
  • 10% of Adjusted total income                     XXX

Lower of a or b                                                       XXX

Adjusted total income is total income before deduction under section 80G

For instance Mr. Y is having Income of Rs. 6,00,000 from Salary and has made donation of Rs. 70,000 to Shri Ram Janmabhoomi Terth Kshetra.

Let us calculate the total income of Mr. Y assuming that Mr. X is having no other income and has no other deduction in his hand:

ParticularAmount
Gross total Income6,00,000
Less: Deduction under Chapter VIA 
80G: Donation to Shri Ram Janmabhoomi Terth Kshetra (WN1)(30,000)
Net Taxable Income5,70,000

Since, Donation to Shri Ram Janmabhoomi Terth Kshetra comes under limited category, Mr. X can get maximum deduction under 80G as follows:

ParticularsAmount
(A) Total donation70,000
(B) 10% of Adjusted total income (6,00,000 *10%)60,000
(C)Lower of A or B60,000
Maximum donation under 80G (50% of C)30,000

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