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Key Differences Between Form 10BD and Form 80G

What are the Key Differences Between Form 10BD and Form 80G?

Introduction

When it comes to making donations, donors often look for ways to maximize their tax benefits. The Income Tax Act, 1961, provides several options for donors to claim tax deductions on their donations. The two such options are Form 10BD and Form 80G. In this article, we will discuss the difference between Form 10BD and Form 80G and which option is the right choice for the donors.

What is Form 10BD?

Form 10BD is a statement required to be furnished by the assignee, i.e., the trust, NGO, or institution that receives donations under Section 80G of the Income Tax Act, 1961. The purpose of this form is to provide details of the donations received during the financial year and to ensure that the donations received are genuine and eligible for tax benefits. All donations received by an organization, whether domestic or foreign, must be reported on the form.

The Form 10BD must be furnished to the donor for each donation received during a financial year. The due date for filing Form 10BD is on or before the 31st of May immediately following the financial year in which the donation is received.

What is Form 80G?

Form 80G is a certificate issued by the Income Tax Department to donors who make donations to eligible charitable organizations. This certificate allows donors to claim tax deductions on their donations. The amount of tax deduction varies depending on the type of organization and the amount of donation. Donations made to organizations registered under Section 80G are eligible for a deduction of 50% or 100% of the donated amount, subject to certain conditions.

Difference between Form 10BD and Form 80G

The following table summarizes the key differences between Form 10BD and Form 80G:

Criteria	Form 10BD	Form 80G
Purpose	Statement of donations received by the assignee.	Certificate of eligibility for tax deduction issued to the donor.
Filed by/ issued to	Assignee (trust, NGO, or institution)	Donor
Information required	Details of donations received during the financial year.	Details of the donor and donated amount.
Due Date	The Form 10BD due date is on or before the 31st of May immediately following the financial year in which the donation is received.	At the time of filing the income tax return.
Eligibility for tax deductions	Not applicable.	Donations made to eligible charitable organizations are eligible for tax deductions.

Which is the right option for donors?

Donors should choose the option that suits their needs and preferences. If donors want to claim tax deductions on their donations, they should opt for Form 80G. Donors should ensure that the organization they are donating to is registered under Section 80G and that they receive a valid Form 80G certificate. On the other hand, if donors are assignees, i.e., trusts, NGOs, or institutions that receive donations, they should file Form 10BD to report the donations received during the financial year.

Conclusion

In conclusion, Form 10BD and Form 80G are two options available to donors to claim tax deductions on their donations. Form 80G is a certificate issued by the Income Tax Department to donors who make donations to eligible charitable organizations, while Form 10BD is a statement required to be furnished by the assignee, i.e., the trust, NGO, or institution that receives donations under Section 80G of the Income Tax Act, 1961. Donors should choose the option that suits them best.