Tax breaks & how they are useful.

Paying tax is inevitable and most companies dread it. Every company looks to reduce its taxes. Charitable donations have come to be known as the easiest way for people to get a tax break. 

What is a tax break?

In literal terms, a tax break is any item that helps avoid taxes. It includes any tax exemption, tax deduction, or tax credit. If the government gives a person or a company a tax break, their total payable tax amount reduces. 

Some companies use charities to get a tax break, while others want to genuinely donate to the society. Doing charity or donating to places like NGOs give companies a chance to reduce their taxes vehemently. To promote themselves, people donate and give charity. The Income Tax department in India allows a person or a company to claim an exemption under section 80G. This has given rise to malpractices. For getting a tax break, many companies donate to charities on purpose and not out of the motif of doing a good deed. 

Tax breaks are available on NGOs, religious institutes, or many other places like schools. But donating to government-affiliated funds like a PM Cares Fund will not provide you with a tax break. 

Here are some ways in which you can get a tax break and also feel good:

Fund schools:

Schools or any other educational institutes are the best places for donating. Providing education to the needy will surely give you happiness. 

Donate to old-age homes:

An old-age home is another place where one can donate funds and get a tax break. 

Develop a foundation:

Developing a foundation of your own is a great way to expand as a company, get a tax break, and do a good deed.