Full amount allowed as deduction if donation was for business purpose section 80G not an obstruction

Deduction with respect to donations to certain specified funds, charitable institutions, etc is allowable to any taxpayer (individual, company, firm or any other person). In this article we will discuss about some further issues regarding section 80G. We all know that under 80G section we only get benefits for giving donation to specified institutions! Well what if we give a donation to others? In a practical scenario there are many case where business institution need to donate a substantial amount before they can operate or carry out there business activity in certain areas. For example before acquiring a  property in certain places business entities need to pay of the people residing in the place before it can use it. This might be termed as unethical to some extent, well it’s not. This would be better termed as compensation to the people, for being asked to leave a place where they stayed for a long period of time. Would these compensations be allowed as deduction against business revenue? What was the purpose for incurring this expenditure? Growth right? This proves that the purpose for expending this money is solely for business. Hence this would be allowed as deduction against revenue. This provision would not apply if money is given to some person under pressure. In the above case the entity incurred the expenditure willingly, and reaped benefits out of it resulting in business growth. If, a donation is given due to unlawful pressure, to people who would use it for unlawful activities, then the donation would not be allowed as deduction. Please click here to read a detailed content on the ceiling limits and categories for the available deduction - Deduction for donations – Section 80G _____________________________________________________________________________________________ Feel free to write to us,at [info@taxmantra.com] or call us at +91 88208208 11.