Tax is something that cannot be avoided by any individual who is earning above the tax slab. However, there are some ways to get some tax exemptions. 80G is one such method, and it used to be very popular. People make donations to charitable trusts, and in return, they get exemptions. Today, this is becoming less popular.
The main reason is that people are moving slowly towards the New Tax Regime, and in the New Tax Regime, there is no 80 G exemption, and it does not matter. There are still people using the old tax regime, and only those people make use of the 80G exemption.
80G Trust is heavily being monitored
There is a complaint that many charitable trusts in India bring funds from foreign countries through donations. Some are genuine, and some are done by people who try to make black money white. This has been the case for a very long time, and with some efforts by the government, these are all coming into the radar now.
For people who would like to renew their 80 G certificate now will have to make sure the documentation is proper and their activities are properly done. The Income Tax department is also asking for photo documentation for some of these activities.
From what I understand from my CA friends, many illegal activities have been controlled because of this initiative, and most likely, if this continues, there is a high chance that some black money movements can be controlled.
New Tax Regime people don't bother
Today mostly many people have started using the New Tax Regime, and they don't bother. I don't know if this will reduce the amount of donations people make to charitable trusts, but maybe it will remove the criteria where people can expect an 80G exemption for the donations they are making. Some people are genuinely doing donations to charitable trusts, and they don't expect any exemption in return.
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