Section 80G & 80GGA - Donations Eligible Under Section 80G and 80GGA

Section 80G of the Indian Income Tax Act allows a tax deduction for contributions to certain relief funds and charitable institutions. It encourages charity by providing tax deductions to donations made by the taxpayer. 

Depending upon the donee, deduction can be claimed up to 100% or 50% of the amount donated respectively. Most contributions made to government relief funds and can be claimed 100% without any restriction (qualifying limit) under this section. 

Under section 80GGA, any donation made to research institutions can be claimed as a deduction, subject to conditions specified. Interestingly, there is no maximum limit for claiming deduction under this section. 

For both section 80G and 80GGA, the donation should be made in prescribed electronic modes. But, cash payments up to Rs. 2,000 can be claimed as a deduction under both these sections. 

Section 80G

What is Section 80G?

• Section 80G allows deduction to taxpayers on donations made to prescribed government relief funds and charitable institutions.
• Any of the following taxpayer can claim a deduction under this section: 
  • Individuals 
  • Companies 
  • Firms 
  • Hindu Undivided Firm (HUF)
  • Non-Resident Indian (NRI)
  • Any other person
• Depending on the donee, deduction can be claimed up to 100% of donation or 50% of the donation, subject to restrictions as the case may be.
•  Even full donation paid to certain funds can be claimed as deduction under this section (without maximum limits), thus significantly reducing the overall tax liability.
• However, t115BAC).

Mode of Payment Under Section 80G

Section 80G deductions can be claimed by taxpayers when they make donations through the following modes:

• Cheque 
• Demand draft 
• Cash (for donations up to Rs 2,000)

Note: 

1. In-kind contributions such as food, material, clothes, medicines etc., and donations of above Rs 2,000 in cash they do not qualify for deduction under Section 80G. 
2. Donations above Rs 2,000 should be made in any mode other than cash to qualify under Section 80G.

The various donations specified in Section 80G are eligible for a deduction of up to 100% or 50% with or without restriction, as provided in Section 80G.

List of Donations Eligible for 100% Deduction without Qualifying Limit

• National Defence Fund set up by the Central Government
• Prime Minister’s National Relief Fund and PM CARES 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 medical relief to the poor
• National Illness Assistance Fund
• National Blood Transfusion Council or 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 the earthquake in Gujarat
• Any trust, institution or fund to which Section 80G(5C) applies for providing relief to the victims of the earthquake in Gujarat (contribution made between January 26, 2001, and September 30, 2001)
• 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)

List of Donations Eligible for 50% Deduction without Qualifying Limit

• Prime Minister’s Drought Relief Fund

List of Donations Eligible for 100% Deduction Subject to 10% of Adjusted Gross Total Income

• Donations to the government or any approved local authority, institution or association to be utilised to promote family planning
• Donation by a company to the Indian Olympic Association or any other notified association or institution established in India to develop infrastructure for sports and games in India or sponsor sports and games in India.

List of Donations Eligible for 50% Deduction Subject to 10% of Adjusted Gross Total Income

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

What is Adjusted Total Income?

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

• Amount deductible under Sections 80C to 80U (but not Section 80G)
• Exempt income
• Long-term capital gains
• Short-term capital gains u/s 111A
• Income referred to in Sections 115A, 115AB, 115AC, 115AD and 115D

How to Calculate the Deduction under section 80G?

1. Calculate Gross Total Income (GTI)
   
   • Compute your total income before claiming any deductions under Chapter VI-A (including 80G).
2. Calculate Adjusted Total Income
   
   • Subtract all deductions except Section 80G from the Gross Total Income.
   • Also, exclude Long-term capital gains, Short-term capital gains under Section 111A, Income under Sections 115A, 115AB, 115AC, and 115AD, All incomes covered under Chapter VI-A, except 80G
3. The resulting figure is called the Adjusted Total Income.
4. Calculate 10% of Adjusted Total Income.
   
   • This is known as the Qualifying Limit. It applies to donations subject to a limit.
5. Categorise Donations
   
   • Separate donations into the following categories:
     a. 100% deduction without limit
     b. 50% deduction without limit
     c. 100% deduction subject to qualifying limit
     d. 50% deduction subject to the qualifying limit
6. Allow Deductions Without Qualifying Limit
   
   • Allow full deduction for donations in categories (a) and (b).
7. Apply Qualifying Limit to Remaining Donations
   
   • For donations in categories (c) and (d):
     a. Total donations eligible under the qualifying limit = the lower of actual donations or 10% of adjusted total income
     b. Set off donations under 100% (qualifying limit) first
     c. Any balance remaining is considered for 50% (qualifying limit) deduction
     d. Deduction for 50% donations = 50% of the remaining eligible donation
8. Compute Total Deduction under Section 80G
   
   • Add:
     
     • Full deductions (from step 5)
     • Deductions under the qualifying limit (from step 6)

How does Deduction Under Section 80G Benefit Different Types of Taxpayers?

The tax benefit will depend on the tax rate applicable to the taxpayer. 
For example, Mr S is an individual and M/s. P Pvt. Ltd., a company, gives Rs 1,60,000 to an NGO. The total income for the AY 2025-26 of both Mr S and M/s. P Pvt. Ltd. is Rs 7,00,000. The tax benefit would be as shown in the table:

Note: The above computation is done on the basis of slab rates applicable to the old tax regime, since the assessee gets the benefit of deduction only if he opts to pay tax under the old tax regime.

Details and Documents Required to Claim Deduction under Section 80G 

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
• Amount of contribution – the breakup of contribution in cash and another mode
• The amount eligible for deduction

Taxpayers who want to claim tax deduction under Section 80G must have the following documents to support their claim:

• Duly stamped receipt: Obtaining a receipt issued by the charity/trust to which you donate the amount is mandatory. The receipt should include details such as your name, address, amount donated,  PAN number of the trust, etc.
• Registration number of trust: All eligible trusts under this section are provided with a registration number by the Income Tax Department. Donors should ensure that the receipt contains the trust registration number.

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 an income (or loss) from a business and/or a profession.

Note: This deduction is not available if an individual taxpayer opts to pay taxes under the new tax regime (115BAC). 

Mode of Payment for Claiming Deduction Under Section 80GGA

Donations can be made through a cheque, a draft, or cash. However, cash donations over Rs 2,000 are not allowed as deductions. 100% of the amount donated or contributed is eligible for deductions. 

List of Donations Eligible Under Section 80GGA

• Any sum paid to a research association that undertakes scientific research, or a sum paid to a college, university, or any other institution to be used for scientific research that is approved by the prescribed authority under Section 35(1)(ii)
• The 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 must all be approved by the prescribed authority under Section 35(1)(iii)
• The sum paid to an approved association or institution which undertakes any programme of rural development and is approved under Section 35CCA
• The sum paid to an approved association or institution which undertakes training of person(s) for implementing programmes of rural development
• The sum paid to a public sector company, local authority or an approved association or institution which carries out projects or schemes approved under Section 35AC.
• The sum paid to notified Rural Development Fund
• The sum paid to notified Fund for Afforestation
• The 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.