Description

BSE clarifies that donations made through the Social Stock Exchange platform are eligible for tax deductions under Section 80G of the Income-tax Act, 1961.

Summary

BSE has issued a clarification confirming that donations made through the Social Stock Exchange (SSE) platform are eligible for tax deductions under Section 80G of the Income-tax Act, 1961. This clarification is aimed at enhancing transparency and encouraging participation in the SSE framework by providing tax benefits to donors.

Key Points

  • Donations made through the Social Stock Exchange (SSE) qualify for tax deductions under Section 80G
  • This applies to donations made to registered Not-for-Profit Organizations (NPOs) and Social Enterprises on the SSE platform
  • The clarification aims to promote social impact investing and philanthropy through the SSE framework
  • Donors can claim tax benefits as per the provisions of Section 80G of the Income-tax Act, 1961
  • This measure is expected to boost donor participation and funding for social causes listed on SSE

Regulatory Changes

No new regulatory changes introduced. This is a clarification regarding the applicability of existing Income Tax Act provisions to SSE donations.

Compliance Requirements

  • NPOs and Social Enterprises on SSE should ensure they maintain proper Section 80G registration and certification
  • Donors should obtain proper donation receipts for claiming tax deductions
  • Organizations should comply with reporting requirements under the Income-tax Act for Section 80G donations

Important Dates

  • Circular Date: December 16, 2025
  • Effective immediately for all eligible donations through SSE

Impact Assessment

Positive Impact:

  • Enhances attractiveness of SSE platform for donors by providing tax benefits
  • Expected to increase fundraising capabilities for NPOs and Social Enterprises listed on SSE
  • Promotes social impact investing and philanthropic activities
  • Provides clarity on tax treatment of SSE donations, reducing uncertainty

Market Impact:

  • May lead to increased participation in SSE by both donors and social organizations
  • Strengthens the SSE ecosystem by offering tax incentives comparable to traditional donation channels
  • No direct impact on equity or derivative trading segments

Impact Justification

Clarification regarding tax benefits for SSE donations affects donor confidence and SSE platform adoption but does not directly impact trading operations