Kolkata: With escalating armed conflict between India and Pakistan threatening to turn into a full-scale war, this can be an appropriate moment to consider contributions to the National Defence Fund. While the money from the National Defence Fund is spent only on the armed forces, it also offers the contributors income tax deductions. Let’s check out the details.
The National Defence Fund was set up in 1962. It sustains only on voluntary donations from the people of India. The fund has been designed to promote the national defence effort. The money that is accumulated in National Defence Fund is used exclusively for the armed forces and para military forces of the country. According to the policy of the government of India, the fund is fully dependent on voluntary contributions from the people since it there is no budgetary allocation to this fund.
Section 80G of the Income Tax Act
Section 80G of the Indian Income Tax Act has been designed to encourage contributions to relief funds and charitable institutions. The incentive is by providing tax breaks to the contributor. Therefore, if you have made a donation to the National Defence Fund in a particular financial year, you can claim income tax deductions on the contribution for that year and saves income tax outgo.
According to government data, the amount of money received in the past five years and the balances every year are given below:
- FY21: Receipt Rs 87.04 crore, Balance: Rs 1,284.49 crore
- FY22: Receipt Rs 90.64 crore, Balance: Rs 1304.38 crore
- FY23: Receipt Rs 110.74 crore, Balance: Rs 1337.36 crore
- FY24: Receipt Rs 119.29 crore, Balance: Rs 1396.22 crore
- FY25: Receipt Rs 130.95 crore, Balance: Rs 1447.60 crore
Since the outbreak of the conflict, a few fund managers and investment experts have also urged that people consider donations to the National Defence Fund which also makes tax sense for the contributor. In fact, an investment strategist has recommended that people consider starting SIPs in this fund. Incidentally, one can make online contributions to the fund. The rules state that any person can make donations through websites such as ndf.gov.in, pmindia.gov.in and www.onlinesbi.com website of State Bank of India. However, it is always advisable that one consults a personal finance expert before putting one’s hard-earned money.
Donating to the NDF will not only help one to stand with the armed forces but will also help one to get full tax exemption according to Section 80(G) of the Income Tax Act. Personal Finance Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
