Ayodhya Ram Mandir: You can save on income tax by contributing to temple

Fifty per cent of the amount donated for renovation/repair of the Mandir to Shri Ram Trust is eligible for deduction under Section 80G.

The Ayodhya Ram Mandir falls under the umbrella of Section 80G through the Shri Ram Janmabhoomi Teerth Kshetra Trust, the body entrusted with the temple's construction. This Trust is duly registered under Section 80G, making donations made to it eligible for tax deductions.

Section 80G of the Income Tax Act of 1961 allows all categories of taxpayers, including individuals, companies, firms, LLPs, etc., to save tax by donating money to eligible charitable institutions. Both resident and non-resident taxpayers can claim this deduction. By donating to eligible institutions and organisations, taxpayers can claim deductions ranging from 50 to 100 per cent of the amount donated.

The Central Government has notified Shri Ram Trust as a place of historic importance and a place of renowned public worship for Section 80G(2)(b) w.e.f. FY 2020-21. Hence, the donations made to renovate or repair the temple are eligible for deduction.

Are all Ram Mandir donations eligible for deduction? 

Eligible deduction applies only to donations related to the repair and renovation of the Ram Mandir. Contributions towards other activities under the Trust's purview, such as religious events or social welfare initiatives, are not covered under Section 80G.

"Donors can participate in the construction of the grand temple for Sri Ram at Ayodhya by donating to the Shri Ram Janmabhoomi Teerth Kshetra Trust. Donations to the trust are eligible for deduction under section 80G of the income tax act. The deduction is available to donors of 50% of the donation amount up to a ceiling of 10% of the adjusted Gross total income," said  Pallav Pradyumn Narang, Partner.

 If the total amount donated to Shri Ram Trust exceeds 10% of your adjusted gross total income (GTI), any excess amount beyond the 10% limit will not be eligible for the deduction," explained CA Tarun Kumar Madaan in a blog released by Taxmann.

"For eg., if a person having a taxable income of Rs 10,00,000, donates Rs 10,000 to the Ram Mandir, he would get a deduction of R 5,000 (50% of Rs. 10,000) from his taxable income. Hence, his net taxable income would now be Rs 9,95,000 only," said  Ankit Jain, Partner, Ved Jain & Associates.

CA Aman Rajput explains the deduction details further: 

1. Deductible percentage: 50% of the donated amount is deductible under Section 80G.
2. Maximum limit: The deduction cannot exceed 10% of your adjusted gross total income (AGTI) in the financial year you donate.
3. Mode of payment: Donations must be made through cheque, draft, or online transfers. 
4. Cash donations exceeding Rs 2,000 are not eligible for deduction.

Only taxpayers who opt for the old tax regime while filing ITR can claim this deduction. Taxpayers who have chosen to file their ITR under the new tax regime are not entitled to this benefit.

How to claim the deduction? 

To claim the deduction while filing for your income tax return, ensure you receive a valid receipt from the Shri Ram Janmabhoomi Teerth Kshetra Trust specifying the following details, as per Rajput.

1. Your name and address
2. Amount donated
3. Date of donation
4. Registration number of the Trust under Section 80G
5. Specific purpose of the donation (mention "repair and renovation" of Ram Mandir)
6. Remember to attach this receipt to your income tax return form when filing for deductions.
7. The deduction can be claimed in the income tax return by filling in the information in ‘Schedule 80G’ in ITR

"The official website of Shri Ram Janmabhoomi Teerth Kshetra offers various options and modes for contributing the amount. A person can log in using Mobile OTP and provide information such as name, purpose of donation, donor PAN Number, donation amount, address, mobile number, email ID, etc. The donation receipt is generated instantly and can be downloaded by the donor. The donor will also receive the donation receipt via email. This receipt will serve as sufficient proof to claim the deduction in the Income Tax return," as per Madaan.

Additional Considerations

Donations made in kind (goods, services) are not eligible for deduction under Section 80G.

Foreign currency donations require specific procedures and may have different deduction conditions.

Does the donor need a Form 10BE certificate to claim a deduction for the amounts donated to Shri Ram Trust?

From FY 2021-22 onwards, a certificate in Form 10BE is required as evidence to support the Section 80G deduction to be claimed while filing ITR, said Madaan. The deduction will only be allowed if the fund or institution provides the details of the donation and donor in the statement filed in Form 10BD electronically on the income tax department’s e-filing portal.

"However, it is important to note that this reporting requirement to file a statement of donation in Form 10BD and issuance of Form 10BE is required only for those NGOs which are under the approval category, i.e. Section 80G(2)(a)(iv). In contrast, Shri Ram Trust is a notified trust as a place of historical importance and a place of public worship of renown under clause (b) of Section 80G(2). Hence, it is not obligated to file a statement of donations in Form 10BD and is not required to issue a certificate in Form 10BE. Therefore, the donation receipt shall suffice as proof of payment while claiming the Section 80G deduction in ITR by donors," said Madaan.