Please advise on the following
An employee yearly earning is around 1.2 million per year, he is interested to pay some charity upto 50k, based on this, is he eligible for any tax credit, if yes then what portion ?
if possible please mention the reference also
thanks
Aslam
As per clause 61,Tax Credit may be divided into two parts,
1. If donation is made to such approved institutions which are specified under clause 61 of part 1 of second schedule, then these Donations are allowed as a straight deduction against total income to arrive at the taxable income,
2. A tax credit at the average rate of tax is provided, if donation is given to the institutions other than mentioned in 1 above.
In this regard, Please explain that, to whom this charity has been given ? then it may be ascertained whether it is allowed as a straight deduction or eligible to have a tax credit,
It is advised to go through the aforementioned sections , so that you may evaluate the taxation of the said person yourself.
however,
Queries will be appreciated.
Best Regards,