Many of us have contemplated donating to charity and doing our bit for society. Given the nobility of this gesture, the government extends its full support towards charitable services and provides tax deductions on the donated amount. Section 80G of the Indian Income Tax Act allows a tax deduction for contributions to certain relief funds and charitable institutions. Thus, you can claim tax deductions in Section 80G apart from Section 80C and save maximum taxes.
Latest Updates
Budget 2023 provided that donations made to the following funds will not be eligible for any deductions under 80G:
Jawaharlal Nehru Memorial Fund
Rajiv Gandhi Foundation
Indira Gandhi Memorial Trust
Eligibility to Claim Deduction Under Section 80G
The following taxpayer can claim a deduction under this section:
However, all donations are not eligible for deductions under Section 80G. Only donations made to prescribed funds qualify as a deduction.
Note: This deduction is not available if an individual taxpayer opts to pay taxes under the new tax regime (115BAC).
What is the 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 below Rs 2,000)
Note: 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. 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.
How to Claim the 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
The above details need to be mentioned in the respective tables given in the ITR.
Table A: For donations entitled to 100% deduction without qualifying limit
Table B: For donations entitled to 50% deduction without qualifying limit
Table C: For donations entitled to 100% deduction subject to qualifying limit
Table D: For donations entitled to a 50% deduction subject to the qualifying limit
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
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
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
Jawaharlal Nehru Memorial Fund*
Indira Gandhi Memorial Trust*
Rajiv Gandhi Foundation*
*Donations to these funds are not eligible for deduction from FY 2023-24 onwards.
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 aggregate 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 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 2024-25 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:
Particulars
Mr X
M/S. P Pvt. Ltd.
i) Income for the financial year 2023-24
7,00,000
7,00,000
ii) Donation made to NGO
1,60,000
1,60,000
iii) Qualifying amount for deduction (50% of the donation made)
80,000
80,000
iv) Amount of deduction u/s 80G (gross qualifying amount subject to a maximum limit of 10% of the gross total income)
50,000
50,000
v) Taxable income after deduction
6,20,000
6,20,000
A. Tax payable after considering a donation -Mr S tax calculated as per income tax slab rate -M/s. P Pvt Ltd. tax calculated at 30%
36,500
1,86,000
B. Tax payable before donation
52,500
2,10,000
C. Tax Benefit from Section 80G deduction
16,000
24,000
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.
Documents Required to Claim a Tax Deduction on Donations
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.
I donated to a trust of Rs 5,000 in cash, which is qualified for a deduction under section 80G. Can I claim a deduction when at the time of filing a return?
No, 80G donations made over Rs 2,000 won’t qualify for a deduction, so you cannot claim a deduction for the same.
Can a partnership firm claim deduction under Section 80G?
Yes. Individuals, firms and companies can claim deduction under Section 80G.
I am a non-resident and made donations to Prime Minister’s Relief fund. Can I claim a deduction under Section 80G?
Yes, the benefit of claiming a deduction under Section 80G is allowed to both residents and non-residents.
What is 80GG in income tax? What is rent paid under 80GG?
80GG allows you to claim a deduction for rent paid even if your salary does not include the HRA component or by self-employed individuals having income other than salary. The condition is that you should not own any residential accommodation in the place of residence to claim deduction under 80GG.
Who can claim a deduction in 80GG?
Deduction under Section 80GG is available for employees who do not get HRA as a component of salary. HRA is not received by employees generally doing jobs in the informal sector or by self-employed persons. The person claiming this deduction should not own a house where he resides.
Can I claim both 80GG and HRA?
No, individuals paying rent but not receiving house rent allowance are allowed to claim a deduction under Section 80GG. Also, the individual, spouse or children should not own a house property in the place of employment for claiming this deduction.
Can I claim this deduction if I opt for the new taxation regime?
No, deduction under section 80G and 80GGA is not allowed to persons opting for the new tax regime.
What are the documents required for claiming deduction under section 80GGA?
Receipts containing the registered name of the trust, name of the income tax payer and amount of donation, the registered number given by the Income Tax Department.
Can donations in kind qualify for deduction under Section 80G?
No, donations in kind do not qualify for deductions under Section 80G.
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Quick Summary
Section 80G of the Indian Income Tax Act provides tax deductions for charitable donations. Donations to specific funds are not eligible for deductions from FY 2023-24. Different types of taxpayers can claim deductions, subject to various limits. Taxpayers must provide specific details in their income tax returns to claim the deduction. Donations through cheque, demand draft, or cash below Rs 2,000 are eligible. Documents like receipts and trust registration numbers are necessary to support the claim.
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