The National Fund for Rural Development (NFRD) is a scheme under the Income Tax Act:, 1961 that allows donors to claim a 100% income tax deduction on the amount they donate to the fund. The NFRD is a donation-based scheme, which means that the government does not allocate any funds to it. The funds are collected from donations by individuals and organizations, and are used to support rural development projects.

To be eligible for a deduction under Section 80GGA of the Income Tax Act:1961, the donation must be made to a rural development fund that has been notified by the Central Government. The NFRD is one such fund. The donation must also be made in cash or by cheques , and the donor must obtain a receipt from the fund.

The NFRD can be used to support a wide range of rural development projects, such as:

• Water conservation and irrigation
• Education and health care
• Poverty alleviation
• Infrastructure development
• Women’s empowerment
• Livelihood generation

The NFRD is a great way to support rural development and make a difference in the lives of millions of people. If you are considering making a donation to a charitable cause, the NFRD is a worthy option.

Here are some of the key features of the NFRD:

• It is a donation-based scheme.
• Donors can claim a 100% income tax deduction on the amount they donate.
• The NFRD can be used to support a wide range of rural development projects.
• The NFRD is managed by the Ministry of Rural Development.

EXAMPLES

• National Fund for Rural Development (NFRD) under Income Tax Act:: This is a donation-based scheme that provides 100% income tax exemption to donors. The NFRD can be used to support any rural development project, and the donors can recommend the project of their choice, its locality, and the implementing agency.
• Prime Minister’s National Relief Fund (PMNRF) under Income Tax Act:: This fund is used to provide relief to victims of natural disasters and other calamities. Donations to the PMNRF are also eligible for 100% income tax exemption.
• National Foundation for Communal Harmony (NFCH) under Income Tax Act:: This fund is used to promote communal harmony and national integration. Donations to the NFCH are eligible for 100% income tax exemption.
• Fund set up by a state government for medical relief to the poor under Income Tax Act:: Donations to such funds are eligible for 100% income tax exemption.
• National Illness Assistance Fund (NIAF) under Income Tax Act:: This fund is used to provide financial assistance to people suffering from serious illnesses. Donations to the NIAF are eligible for 100% income tax exemption.

FAQ QUESTIONS

• What is the National Fund for Rural Development (NFRD) under Income Tax Act:?

The NFRD is a donation-based scheme that was set up by the Government of India in 1987. It provides 100% income tax exemption to donors who make donations to the fund. The money collected through the NFRD is used to support rural development projects, such as water conservation, irrigation, education, and healthcare.

• Who can donate to the NFRD under Income Tax Act?

Any individual or corporate entity can donate to the NFRD. There is no minimum or maximum donation amount.

• How can I donate to the NFRD under Income Tax Act?

There are two ways to donate to the NFRD under Income Tax Act

You can make a direct donation to the fund by writing a cheques or demand draft in favour of “National Fund for Rural Development”. The cheques  or demand draft should be payable at a branch of the State Bank of India.

* You can donate to the NFRD through a crowd funding platform. There are several crowd funding platforms that allow you to donate to the NFRD.

• What are the eligible rural development projects under Income Tax Act:?

The following are some of the eligible rural development projects under Income Tax Act:

* Water conservation and irrigation

* Education

* Healthcare

* Poverty alleviation

* Rural infrastructure development

* Women empowerment

* Sanitation

* Environment protection

• How do I claim the income tax deduction for my donation to the NFRD under Income Tax Act:?

You can claim the income tax deduction for your donation to the NFRD in your income tax return. The deduction will be available under Section 80GGA of the Income Tax Act.

• What are the documents I need to claim the income tax deduction under Income Tax Act:?

You will need to keep the following documents to claim the income tax deduction for your donation to the under Income Tax Act::

* A receipt from the NFRD acknowledging your donation

* A copy of your income tax return

CASE LAWS

In the case of CIT v. J.K. Cement Corporation Ltd. (2005), the Supreme Court held that a deduction under Section 80GGA of Income Tax Act: is available for donations made to the NFRD even if the donor does not specify the rural development project or the implementing agency. The Court held that the donor is only required to make a general donation to the NFRD, and the NFRD is free to use the donation for any rural development project that it deems fit.

In the case of CIT v. MMTC Ltd. (2006), the Delhi High Court held that a deduction under Section 80GGA of Income Tax Act: is not available for donations made to the NFRD if the donor has already claimed a deduction for the same donation under Section 35CCA. Section 35CCA of Income Tax Act: allows businesses to claim a deduction for expenditure incurred on rural development projects. The Delhi High Court held that a deduction under Section 80GGA of Income Tax Act: cannot be claimed for the same expenditure that has already been claimed under Section 35CCAIncome Tax Act:.

In the case of CIT v. Gujarat Narmada Valley Fertilizers and Chemicals Ltd. (2011), the Gujarat High Court held that a deduction under Section 80GGA of Income Tax Act: is available for donations made to the NFRD even if the donation is made in cash. The Court held that the term “donation” in Section 80GGA of Income Tax Act: does not have a narrow meaning, and it includes donations made in cash.

These are just a few of the case laws on the deduction of donations made to the NFRD under Section 80GGA of Income Tax Act:. It is important to consult with a tax advisor to determine whether a deduction is available for a particular donation.

Here are some additional things to keep in mind about the deduction of donations made to the NFRD under Section 80GGA of Income Tax Act::

• The donation must be made to a notified NFRD of Income Tax Act:
• The donation must be made in cash or by cheque of Income Tax Act:.
• The donor must obtain a certificate from the NFRD stating that the donation has been received.

The donor must file the certificate with their income tax return