Akshaya patra is an NGO in Bangalore working towards eliminating classroom hunger through midday meals. By being a part of this venture by donating to this noble cause one can not only get the satisfaction of doing good but also enjoy tax benefits

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Salaried employees are major contributors to the bucket of taxpayers in a country. Income tax is paid as a part or percentage of the annual income that an individual earns. It is every citizen’s duty to pay his income tax for all the rights he earns in the country while he earns as a salaried employee or as an entrepreneur.

According to the Government of India’s e-Filing portal of the Income Tax Department, there were 8.83-crore taxpayers till 7th September 2021.

The money collected by the tax department is used to provide various facilities for the benefit of the citizens. How do you think the Government of India is able to provide facilities free of cost? For example, public utility services like metro construction, road construction, free health care facilities for the underprivileged, all come from the money that is paid when you pay taxes.

The Government has made various provisions to help its citizens gain tax exemption in India.

Paying tax is inevitable, however making smart investments that will help you save as well, is a smart choice people can opt for.

Tax exemption in India

Depending on the nature of the income, there are various categories for tax exemption in India. The most common of these are: House Rental Allowance (HRA), Education loan, car loan, Leave Travel Allowance (LTA), contribution towards Employee’s Provident Fund (EPF) Scheme, etc.

House Rent Allowance

If you are a salaried employee who lives in a rented house, you stand a chance to get the benefit of HRA. This amount could either be totally or partially exempted from income tax. However, if you are not living in a rented property but claim HRA, this entire amount will be taxable.

Leave Travel Allowance

If you are a salaried employee and your employer has the provision of LTA, you can claim for the exemption of your travel within India under Section 10(5) of the Income Tax Act, 1961. However, tax exemption does not include food expenses, shopping and stay, but, only for travel of the individual, their family including children.

Deductions under section 80C, 80CC and 80CCD (1)

This is by far, the most extensively used option to save tax. To encourage individuals to save and invest in retirements plans, the Indian Government has made provisions for individuals under these sections. These include Life Insurance premium, Equity Linked Savings Scheme (ELSS), Employee Provident Fund (EPF), Contribution to PPF Account, National Pension Scheme, National Saving Certificate (NSC), etc.

NGO donations under section 80G

An individual can get involved in philanthropic donations for tax write off. Charitable organisations give a platform for an individual to engage in humanitarian services as well as to appreciate the noble work by making you eligible for tax exemption too. The deductions under Section 80G of the Income Tax Act of 1961 towards charitable organisations are either eligible for 50% or 100% tax exemption depending on the NGO being supported.

When you contribute by making donations for tax write off, you are not only saving on your taxable income, but you also add goodness in your life for helping people in need. Thousands of not-for-profit organisations receive donations for tax write off, but the help that they provide to the organisation to work towards its cause is often gone unnoticed.

Benefits of making NGO donations

Gives inner satisfaction of helping people
Giving back to society makes an impact
Connects with like-minded people
Saves tax on your contribution
Draws attention to the cause
Helps people in need with what they require

Every little support to people in need gives them relief from their suffering. The Akshaya Patra Foundation is an NGO in India that provides free and unlimited food for education of children coming from challenging socio-economic backgrounds. It has the distinction of being the world’s largest NGO run school lunch programme spread across 60 locations in 14 states and 2 union territories of India.

Akshaya Patra provides nutritious and locally palatable meals to 1.8 million children coming from low-income sections of society.

Akshaya Patra is an NGO known for 21 years of relentless service, financial transparency, and credibility. All your donations above INR 500 made towards this NGO, are eligible for 50% tax exemption under section 80G of the Income Tax Act. You will also get a tax exemption certificate within seven working days with your name and contribution amount. So the next time you plan on making tax saving investment, think of the benefits of donating to NGOs.

Do you reside in Dallas with the hope of buying a new home? Is conventional housing loan expensive? Well! USDA Rural Housing Loan is the best option.

If you live in a rural area, it is the government initiative for rural development. The regular housing loan is costly compared to this loan program.

Hence, don’t worry, even if your income is less moderate. There are specific property and income eligibility. So, let us learn more about the same.

What do you mean by USDA Rural Housing Loans?

USDA Home Loans Dallas is a mortgage guaranteed by the US government. It is applicable if you live in a rural area and have a low household income.

The government support rural development to improve the quality of life. There was the establishment of section 508 in 1949. And it offers less costly finance to purchase a house through 2 programs.

They are section 502 direct loan and section 502 guaranteed loan. Both programs will provide 100% financing to the entitled borrowers.

What are the benefits of USDA Rural Housing loans?

The majority of the housing loan need down payment. And it can vary from 3.5 to 20 % as per the finance option. But, USDA will not permit you to pay any down payment.

The qualification of the borrowers is lenient. In case of more debts, USDA Home Loans Dallas is more forgiving than other loans. You need to spend less amount on Mortgage Insurance.

This loan doesn’t have PMI needs. USDA Home Loans Dallas offers low-interest rates compared to other mortgages. If you buy one, you will save your income money.

What is the property eligibility on USDA Housing loans?

The location of your home needs to be under planned unit development. The property should be inside the rural area nominated for USDA loans eligibility.

Only single-family needs to live but not an apartment building. The maximum price is not qualified, and you need to be eligible for loan repayment.

And it will have an impact on the maximum price. The home needs to meet the requirement of the Department of Housing and Urban Development’s (HUD).

What is the income eligibility on USDA Rural Housing loans?

USDA loans are suitable for people who want to meet their economic needs. To qualify, you need to show your continuous income.

You can also pay mortgage payment in the absence of incident for at least one year as your assets, current income and savings.

The loan mortgage lender will study the debt to income ratio. If it meets the requirements, they will consider you for a USDA loan. For qualification in the income level, it is advisable to have debt below 41% of the income ratio.

What is the process for USDA Rural Housing loans?

Get a pre-approval letter from the USDA housing loan specialist. Get a contract for the sales on the selected home. Read and sign the document to the loan specialist.

There will be an inspection and appraisal of your property. Next, there will be an underwriting process of the documents. You need to send the requested documents to the underwriter.

He will send the documents to the USDA office for approval. Finally, the underwriter will receive the file from USDA stating,” Clear to close”.

Plenty of books have been written about “securing your financial future” and some of them like Rich Dad, Poor Dad or/The Millionaire Teacher are staples of Canadian financial literacy. However, if you don’t have time for books right now and financial life coaching services are not in the cards, here is some stripped-down financial advice to get you pointed in the right direction.

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1. Calculate your net worth Take the market value of all your significant assets including houses, investments, vehicles,/cash savings,/and subtract what you owe on your mortgage, credit cards, LOC, student loans, vehicle loans, etc. Focus on the big-ticket items…. you can ignore the $50 you have stowed away in your sock drawer! Whatever is left over, whether positive or negative, is your net worth. This is the starting point and yardstick for measuring your financial progress. Going forward, you will need to revisit this calculation on a regular basis to determine your progress. 2. Pay yourself first – and save it!/ You should be aiming to save at least 10% of your after-tax salary. Every payday, that 10% has to get from the daily chequing account where your salary is deposited to a high-interest savings account… like clockwork with no ifs, ands or buts!/How to invest that money is another lesson, but for now, just get a system in place to make ensure you put it aside — money left in a chequing account has a way of disappearing! Overcome your forgetfulness and/or temptation and make that money invisible by setting up an automatic/transfer/to a designated savings account every payday. If you are struggling to meet the 10% goal, you need to list up your monthly expenses and find some low-hanging fruit you can cut and divert into savings./ Dining out, travel, phone/internet/cable plans and gym memberships can add up quickly and are good areas to carve out some savings. 3. Understand where your money is going The top two overspends for Canadians are housing and transportation. The cost of your car is not just the monthly payment! You must include the insurance, gas and/repairs – and it shouldn’t eat up much more than 10% of your after-tax income. Do the same calculation with your housing and make sure to include the mortgage, repairs, utilities and property tax. Aim for a maximum of 30% of after-tax income, not whatever the bank or mortgage stress-test says you can afford. If you find you are way over the 10% target for your car you can easily downgrade, but a change in housing is much more involved. There are numerous fees and related costs to factor in, not to mention the fact that it may be difficult to find a cheaper housing option in your area. We recommend doing the calculation and at least get a benchmark of your current situation. You may be able to save on utilities, repairs or home improvements, or even try and generate some extra income to get closer to the 30% target. 4. Prioritize your debts and create a repayment plan Not all debts are created equal, some cost a lot more than others! If you carry a credit card debt from month-to-month or graduated years ago and are still trying to pay off your student loan, you need to create a repayment plan and stick to it. The interest rate on credit cards assures that paying the minimum every month will only enrichen the card company and cost you thousands in interest charges. Student loans also carry higher interest rates and can handicap your post-graduation financial life for years. We appreciate the value of education but find that many students are not very cognizant of the loan details and just how much the interest rate and payments will be post graduation. Only borrow what is absolutely necessary to get you through your education and don’t bank on a big post-graduation paycheque to quickly reduce that student loan – it may not happen for a few years! A few good books and/or a money coach would be a great addition to building your financial education but learning how to master the above basics won’t take much of your time and give you a solid start to a successful financial life.