Deductions under Section 80G

Contributions made to certain relief funds and charitable institutions can be claimed as a deduction under Section 80G of the Income Tax Act.

All donations are not eligible for deduction under section 80G. Only donations made to prescribed funds qualify as a deduction.

Deduction allowed to all types of tax payers – This deduction can be claimed by any tax payer -individuals, company, firm or any other person.

Mode of Payment – This deduction can only be claimed when the contribution has been made via cheque or draft or in cash. But deduction is not allowed for donations made in cash exceeding Rs 10,000. In-kind contributions such as food material, clothes, medicines etc do not qualify for deduction under section 80G.

From Financial Year 2017-18 onwards – Any donations made in cash exceeding Rs 2000 will not be allowed as deduction. Thus the donations above Rs 2000 should be made in any mode other than cash to qualify as deduction u/s 80G.

Amount of Donation – The various donations specified in section 80G are eligible for deduction up to either 100% or 50% with or without restriction as provided in section 80G.

How to claim the deduction – To be able to claim this deduction the following details have to be submitted in your Income Tax Return

• Name of the Donee
• PAN of the Donee
• Address of the Donee
• and the amount contributed

Prescribed funds & institutions under Section 80G

Donations with 100% deduction without any qualifying limit:

• National Defence Fund set up by the Central Government
• Prime Minister’s National Relief Fund
• National Foundation for Communal Harmony
• An approved university/educational institution of National eminence
• Zila Saksharta Samiti constituted in any district under the chairmanship of the Collector of that district
• Fund set up by a State Government for the medical relief to the poor
• National Illness Assistance Fund
• National Blood Transfusion Council or to any State Blood Transfusion Council
• National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities
• National Sports Fund
• National Cultural Fund
• Fund for Technology Development and Application
• National Children’s Fund
• Chief Minister’s Relief Fund or Lieutenant Governor’s Relief Fund with respect to any State or Union Territory
• the Army Central Welfare Fund or the Indian Naval Benevolent Fund or the Air Force Central Welfare Fund, Andhra Pradesh Chief Minister’s Cyclone Relief Fund, 1996
• The Maharashtra Chief Minister’s Relief Fund during October 1, 1993 and October 6, 1993
• Chief Minister’s Earthquake Relief Fund, Maharashtra
• Any fund set up by the State Government of Gujarat exclusively for providing relief to the victims of earthquake in Gujarat
• Any trust, institution or fund to which Section 80G(5C) applies for providing relief to the victims of earthquake in Gujarat (contribution made during January 26, 2001 and September 30, 2001) or
• Prime Minister’s Armenia Earthquake Relief Fund
• Africa (Public Contributions – India) Fund
• Swachh Bharat Kosh (applicable from FY 2014-15)
• Clean Ganga Fund (applicable from FY 2014-15)
• National Fund for Control of Drug Abuse (applicable from FY 2015-16)

Donations with 50% deduction without any qualifying limit:

• Jawaharlal Nehru Memorial Fund
• Prime Minister’s Drought Relief Fund
• Indira Gandhi Memorial Trust
• Rajiv Gandhi Foundation

Donations to the following are eligible for 100% deduction subject to 10% of adjusted gross total income:

• Government or any approved local authority, institution or association to be utilised for the purpose of promoting family planning
• Donation by a Company to the Indian Olympic Association or to any other notified association or institution established in India for the development of infrastructure for sports and games in India or the sponsorship of sports and games in India.

Donations to the following are eligible for 50% deduction subject to 10% of adjusted gross total income:

• Any other fund or any institution which satisfies conditions mentioned in Section 80G(5)
• Government or any local authority to be utilised for any charitable purpose other than the purpose of promoting family planning
• Any authority constituted in India for the purpose of dealing with and satisfying the need for housing accommodation or for the purpose of planning, development or improvement of cities, towns, villages or both
• Any corporation referred in Section 10(26BB) for promoting interest of minority community
• For repairs or renovation of any notified temple, mosque, gurudwara, church or other place.

Adjusted total income: Adjusted gross total income is the gross total income (sum of income under all heads) less the following:

• Amount deductible under Sections 80CCC to 80U (but not Section 80G)
• Exempt income
• Long-term capital gains
• Income referred to in Sections 115A, 115AB, 115AC, 115AD and 115D, relating to non-residents and foreign companies

Section 80GGA

Section 80GGA allows deductions for donations made towards scientific research or rural development. This deduction is allowed to all assessees except those who have income (or loss) from business and profession.

Mode of payment – Donations can be made in cheque or by draft or in cash; however cash donations in excess of Rs 10,000 are not allowed as a deduction.

100% of the amount that is donated or contributed is considered eligible for deduction.

Eligible donations under Section 80GGA:

• Sum paid to a research association which undertakes scientific research, or sum paid to a college, university or any other institution to be used for scientific research and these are all approved by the prescribed authority under section 35(1)(ii)
• Sum paid to a research association which undertakes research in social science or statistical research or sum paid to a college, university or any other institution to be used for the same purpose and these are all approved by the prescribed authority under section 35(1)(iii)
• Sum paid to approved association or institution which undertakes any program of rural development and is approved under section 35CCA
• Sum paid to an approved association or institution which undertakes trainings of persons for implementing programs of rural development
• Sum paid to a public sector company, local authority or an approved association or institution which carries out project or scheme approved under section 35AC.
• Sum paid to notified Rural Development Fund
• Sum paid to notified Fund for Afforestation
• Sum paid to notified National Poverty Eradication Fund

If a deduction has been allowed under section 80GGA, such expenses shall not be deductible under any other provision of the income tax act.