Description

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

Summary

BSE has issued a clarification regarding the tax treatment of donations made through the Social Stock Exchange (SSE) platform. Donations made to eligible entities registered on the SSE are eligible for tax deduction under Section 80G of the Income-tax Act, 1961. This clarification provides certainty to donors and may encourage greater participation in social financing through the SSE mechanism.

Key Points

  • Donations made through the Social Stock Exchange (SSE) qualify for tax deduction under Section 80G
  • The clarification applies to donations made to eligible entities registered on the SSE platform
  • This aligns SSE donations with other charitable contributions eligible for tax benefits
  • The clarification is expected to promote social financing through the SSE framework

Regulatory Changes

This is a clarification rather than a new regulatory change. It confirms that the existing provisions of Section 80G of the Income-tax Act, 1961 apply to donations made through the SSE platform, provided the recipient entities meet the eligibility criteria.

Compliance Requirements

  • Donors should ensure that SSE-registered entities receiving donations are eligible under Section 80G
  • Proper documentation of donations made through SSE should be maintained for tax filing purposes
  • SSE-registered entities should maintain their eligibility status for Section 80G benefits

Important Dates

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

Impact Assessment

This clarification has a moderate positive impact on the Social Stock Exchange ecosystem. By confirming tax deduction eligibility, it removes uncertainty for potential donors and may increase funding flows to social enterprises and non-profit organizations registered on the SSE. The impact is primarily beneficial for SSE-registered entities seeking donations and individual/corporate donors looking to support social causes while availing tax benefits. This aligns with the government’s objective of promoting social financing and supports the growth of the SSE platform.

Impact Justification

Clarification on tax benefits for SSE donations may encourage increased participation in social enterprises through the SSE platform, with moderate impact on SSE-registered entities and donors