When IIT Bombay alumni consider giving back, there is a misimpression that the entire amount is an immediate cash outflow. The reality is quite different. I will illustrate with an example.

Let’s imagine what it is like to give $100k to IIT Bombay as a US tax resident*****.

You pay over 3-5 years

It is a pledge. You do not shell out the entire amount in one shot. You can if you’d like!

Let’s break it into 5 equal installments of $20k each

Depending on what cause you give to, schedules might be front-loaded

For the sake of illustration, let’s do $20k a year

That $20k per year is 100% tax deductible

US$ donations are best given to IIT Bombay Heritage Foundation

IITBHF is a qualified 501(c)(3) tax-exempt entity

Your donation is fully deductible up to 60% of your AGI

Practically, it means that $20k is 100% tax deductible

It’s only really $12k* per year

This goes for both Federal and State taxes

Your tax bracket depends on your income and where you are in the US

For illustration, let’s assume you pay 40% taxes on your income

If you think about it, you are only actually donating $12k and not $20k

$8k is going to IIT Bombay instead of federal & state taxes

That’s if you donate cash