Section 80g of Income Tax Act

Income Tax Act has allowed various deductions to taxpayers, and among those deductions, donations made to the charitable organization are also covered as per Section 80G. All the deductions made to a charitable organization are not covered under this section. The donations made to the funds specified in the Act are eligible for deduction.

The deduction under this section can be claimed when the donations are made through cash/cheques/drafts. The donations made in kind are not eligible for deduction under this section. This article discusses Section 80G of the Income Tax Act, 1961.

What are the criteria(s) for availing deduction for donations made under section 80G of the  Income Tax Act?

  • Donations made to charitable institutions do not qualify for 100% deduction. Only donations made to the specified institutions will be eligible for deduction under this section.
  • Donations made in kind do not qualify for tax deductions under this section.
  • Donations made to trusts registered outside India do not qualify for tax deductions under this section.
  • After the 2017 Budget, cannot claim deductions for donations exceeding rupees two thousand in cash.
  • Any assessee can claim the deduction under this section, i.e., An Individual, Indian companies, etc.

    The deductions are categorized as:

  • 100% tax deduction on the amount donated, where no qualifying limit applies.
  • 50% tax deduction on the amount donated, where no qualifying limit applies.
  • Tax deduction available up to 10% of adjusted gross total income
  • The taxpayer needs to provide valid proof against the contributions made.

Which Charitable Institutions are covered under Section 80G?

Amongst various institutions where donations made are eligible for the tax deduction, some are stated below:

  • National Defense Fund
  • National Illness Assistance Fund
  • Fund for the medical relief to the poor (by a state government)
  • Fund for Technology Development 
  • Prime Minister’s Armenia Earthquake Relief Fund
  • National Foundation for Communal Harmony
  • Fund for Control of Drug Abuse
  • National Relief Fund (by Prime Minister)
  • Blood Transfusion Council (National or State)
  • National Sports, National Cultural, National Children’s Fund
  • An approved educational institution of National eminence
  • National Welfare trust of Persons (having Autism, Cerebral Palsy, Mental Retardation, and Multiple Disabilities)
  • The Central Welfare Fund (for Army or Air Force)
  • The Maharashtra Chief Minister’s Relief Fund 
  • Chief Minister’s Earthquake Relief Fund, Maharashtra
  • Jawaharlal Nehru Memorial Fund (50% qualifies for tax deduction)
  • Prime Minister’s Drought Relief Fund (50% qualifies for tax deduction)
  • Indira Gandhi Memorial Trust (50% qualifies for tax deduction)
  • Rajiv Gandhi Foundation (50% qualifies for tax deduction)
  • National Cultural Fund (set up by the CG)
  • Institution/association to be utilized for promoting family planning (deduction under 10% ceiling)
  • Corporation for promoting the interest of minority community [specified in section 10(26BB)] (deduction under 10% ceiling)

What documents are required for claiming the deduction under Section 80G of the Income Tax Act?

The taxpayer must have the receipt received against the donation made with the below-mentioned details:

  • Name and address of the receiver
  • Name of the Donor
  • Donation Amount (to be written in both words and figures)
  • Mode of payment
  • Registration number of the Trust (receiver of donation), as issued by the Income Tax Department along with validity period.
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