Faith and the Economy
Daan, Zakat and Dasvandh: Religious Giving in India
How different religious traditions encourage giving, how much Indians give through religious channels, and how this compares with other charity.
Religious traditions strongly encourage giving.
Traditions
- Daan (Hinduism, Jainism, Buddhism): giving as a virtue.
- Zakat (Islam): an obligatory 2.5 percent of certain wealth each year for the needy, plus voluntary sadaqah.
- Dasvandh (Sikhism): giving a tenth of earnings.
- Tithing (Christianity): traditionally a tenth.
How much Indians give
Surveys suggest a large share of Indian household giving goes to religious organisations and causes, and much is given informally or directly to people in need.
Where it goes
- Temples, mosques, gurudwaras and churches.
- Feeding the poor.
- Education and healthcare.
- Disaster relief.
Effectiveness
- Religious giving builds community and trust.
- Some economists argue funds could be directed to more effective causes; others value local knowledge and trust.
Tax treatment
Donations to eligible religious-charitable trusts may qualify for tax deductions under Section 80G, depending on the trust’s registration.
A family with savings above the zakat threshold calculates 2.5 percent and gives it to needy families and a local school before Ramadan ends.
It also funds food, education, health and relief.
- Traditions encourage daan, zakat, dasvandh and tithing.
- Zakat is 2.5 percent of certain wealth each year.
- Much Indian giving flows through religious channels.
- Effectiveness and tax treatment vary.
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