35 ac approval helps the nonprofit ngo organization, to encourage their donors towards fundraising for their specific approved social welfare projects and ngo issues donation certificate for tax exemption.

Under 35 ac, the donor who donates the nonprofit ngo organization for a specific social welfare project, gets 100% tax exemption for the amount, which they donated from their Gross total Income, after their various internal income deduction. There is no limitation for the donor to donate under section 35 ac.

When a nonprofit ngo organization receives donations under 35 ac sections it should provide a receipt to the donor, which makes them to claim their tax exemption. Also that receipt should be with the date, validity period of 35 ac, and number of 35ac. The receipt which issued to the donor is FORM 58a which is also called as donation certificate.

This exemption is suitable only for the professional income peoples or business people. Other than business person or professionals, this 35 ac tax exemption will not be a valid one. So the people other than business or professional income shall claim the exemption under 80 GGA - [80GGA (2) (bb)] who are unable to claim tax exemption in any of the 35 ac related sections. In 80 GGA section also there is no limitation for the donors to donate. Please refer with your chartered person for the current notification of tax exemption to the donors.

In section 35 ac (i) (iii) the donor gets 125% tax exemption, which is suitable for the donors who are in business or who makes professional incomes. As this 35 ac (i) (iii) is approved only for the organization and institutions which undergo research and development in social sciences like Psychology, sociology, history, anthropology, economics, geography, civics, or statistical research organizations.

In section 35 CCB the donor gets 100% tax exemption as like 35 ac. Click here to know, how to apply for 35 ac

How the donor gets 35 ac tax exemption ?

Example : Mr. Xyz is doing business and getting income of Rs. 20,000 Rupees per month. He donates an organization in a month for Rs. 6000/- Now lets calculate his 35 ac tax exemption:

Particulars Amount in Rs.
Annual salary income of Mr. Xyz - Income tax on this Rs. 24,200 2,40,000
Several Deductions  80,000
Gross Total Income of Mr.Xyz. 1,60,000
Less: Deduction under 35 AC on taxable income 
( 100% of the donation amount )
6,000
NET Income - Income Tax on this Rs.22,220 1,54,000
So the payable tax on Annual salary 24,200
Less: the payable tax after deduction under 35 AC 22,220
Actual tax relief to the donor under section 35AC (Mr. Xyz) 1980

In this way you shall also calculate 125% tax exemption for the donors who donates under 35 ac (i) (iii)

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Useful NGO Books for NGO Management

Handbook for NGOs by Nabhi Publications

NGO Handbook (In Hindi)by Nabhi

Formation and Management of NGOs: Non Governmental Organisations by Anita Abraham

Formation and Management of NGOs (Non Governmental Organisations) - Universal Publication

How to start promote and manageNGO by Xcess

Handbook for NGO's and NPO's by Taxmann Publications Private Limited

NGO & Training Centre in India by Mantri Pragada Markandeyulu

NGOs in India: The challenges of women's empowerment and accountability (Routledge Contemporary South Asia Series)

Management of NGO's by Laxmi Publications

Interesting Issues on Charitable Trusts or Institutions NGOS & NPOS a Complete Guide to Frequently Asked Questions by CA N Suresh

NGO Management: With Case Studies by Surendra Publications


Useful books for TRUST formation and Management

Formation & Management Of A Trust by Nabhi's

Formation and Management of Charitable and Religious Trust Educational and Medical Institution under Income Tax Law by Universal Law Publishing co

All About Charitable Trusts - Formation, Registration, Management & Taxation of CHARITABLE & RELIGIOUS TRUSTS (With Free CD) by CA Virendra K. Pamecha , CA Rakesh Nahar

Formation and Management of a TRUST along with Tax Planning by Nabhi Publication



Useful books for Society formation and Management

Formation and Management of Societies (Telugu) by Pendyala Satyanarayana

Formation & Managements Of A Society by Nabhi

Formation & Management of a SOCIETY by Nabhi New

Formation and Management of Societies by Y. Kameshwara Rao

Formation and Management of a Co-operative Society alongwith Multi State Co-operative societies Act & Rules by Nabhi Board Of Editors


Useful books for NGO fundraising

Funding of NGOs: How to Manage by Mahaveer & Sons

Taxation of Trusts & NGOs by Taxmann

How to Start & Promote NGOs & NPOs in India Starting, Management & Funding of NGOs /NPOs Covering Schemes of the Ministries of Government of India by Xcess Infostore Pvt. Ltd.

Nonprofit: Starting a Charity - How To Successfully Change Lives, Give Aid & Build a Community (Contribution, Not For Profit, Fundraising, Startup, Donation, Volunteering, NGO Book 1)

Fundraising: 10 Tips to Raise Money for Ngos, Small Business and Non-profits

NonProfit Crowdfunding Explained: Online Fundraising Hacks to Raise More for Your NonProfit

Fundraising Techniques and Financial Assistance to NGO by Anmol Publisher

Guide To Fundraising and Public Relations For NGOs and Non Profit Organisations by CSIM




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