Generally speaking any gesture of giving which comes from the heart is known as a donation but you need to to select for best charities to donate to. Defining donation is thus very easy and can be said to be a gift either made legally or physically to either benefit of support a cause or help a charitable organisation. It can refer to any types of aids given to help others like money, clothes, food, emergency provisions etc.
Even though making a donation makes one feel good and should be encouraged whenever and wherever possible, it is also important to know the legal aspects of the same. The fact that there is something called donation tax exemption available makes making a donation a very viable aspect. There are many organisations which accept donations and even give receipts that can be later submitted to get either a 50percent or even a 100percent tax exemption on the amount donated.
There are many different ways in which a donation can be made like:
- Charitable bequests: This is something which can be included in the will a person makes after ensuring the financial well-being of his near and dear ones. It is still considered to be one of the simplest and easily accessible means of making a donation. It can be done in many ways like:
- Making a specific bequest,
- A residual bequest,
- Naming a contingent beneficiary in the form of a charitable organisation or ngo India,
- Universal bequests etc.
The fact that the tax benefits which follow as a result of making charitable bequests can drastically help to reduce the taxes which would otherwise have to be paid out by an estate.
- Life insurance gifts: This can be primarily done in three ways:
- By transferring the benefits of an existing policy to a charitable organisation wherein the premium continues to be paid by the person making the donation while the benefits on maturity are reaped by the organisation concerned,
- By purchasing a new policy and naming a charitable institution as a beneficiary and
- By designating or nominating a charitable organisation as a beneficiary in the event of the death of the policy owner.
- Real-estate gifts: As the name suggests this refers to the gifting of property or estate to a charitable organisation or a non-profit organisation for use after the death of the owner
- Gifts of securities: Securities like shares, bonds, mutual funds etc., can also be given as donations.
- Charitable annuity: This refers to a donation of either money or any other assets made to a charitable organisation wherein earning are either guaranteed for life or for a specified period of time in exchange.
- Endowment funds: These are made against a specific cause taken up by a charitable organisation.
Making a donation is always considered to be a beautiful gift for it not only makes a person feel good but also ensures fiscal benefits in the process. It also helps to benefit a group of people who would otherwise have to do without probably even the basic things required to make a life worthwhile.