Maximize Your Income Tax Refund
File Your Taxes with the Experts

Start Today

  • TrustedTrusted by 1 Million+ Users
  • User Rating4.8 Star User Rating
  • Secure2500 Cr. Taxes Saved Already
Maximize Your Income Tax Refund
linkedin
whatsapp

Section 80G Deduction: Donations Eligible Under Section 80G, 80G Exemption List

Updated on: 20 Jul, 2024 05:09 PM

Section 80G is a provision under the Income Tax Act of India that allows taxpayers to claim deductions for donations made to specified charitable institutions and funds. The purpose of this section is to encourage individuals and organizations to contribute towards charitable causes while also providing them with tax benefits.

The government provides this incentive to encourage charitable donations and support the activities of charitable organizations, which can benefit society as a whole. By providing tax benefits to donors, the government hopes to encourage more people to donate to charitable causes. Taxpayers need to provide the details of their donations and the eligible amount for deduction under Section 80G while filing their income tax returns.

Budget 2023 Update for Deductions Under Section 80G

As per the announcement in budget 2023, the donations made to the following funds will not be eligible for deductions under Section 80G:-

  • Jawaharlal Nehru Memorial Fund
  • Indira Gandhi Memorial Trust
  • Rajiv Gandhi Foundation

In the latest update, individuals who want to claim the deduction under section 80G and take advantage of deductions for donations to charitable institutions are required to submit a TDS-like certificate that has to be downloaded from the Income Tax Department’s e-filing portal by the donee institution or the NGO to which the donation has been made.


What is Section 80G of the Income Tax Act?

Section 80G of the Income Tax Act provides for a deduction for donations made to certain charitable institutions or funds. The deduction is available to individuals as well as companies.

The deduction under section 80G can be claimed on the amount donated to eligible institutions or funds. The deduction can be claimed up to a maximum of 50% or 100% of the donated amount, depending on the institution or fund to which the donation has been made.

However, it is important to note that not all donations are eligible for deduction under section 80G. Only donations made to certain specified funds or institutions are eligible for deduction. It is, therefore, important to check whether the institution or fund to which the donation has been made is eligible for deduction under section 80G.

To claim the deduction under section 80G, the taxpayer must obtain a receipt or 80G certificate from the institution or fund to which the donation has been made.

The receipt should contain the name and address and PAN no.of the institution or fund, the amount donated, and the registration number of the institution or fund under section 80G.


Eligibility to Claim Deduction Under Section 80G

Both company and non-company can claim a deduction under Section 80G of the Income Tax Act for donations made to eligible charitable institutions or funds.

The following persons can claim deduction under section 80G -

  • Individuals
  • Companies
  • Firms
  • Hindu Undivided Family (HUF)
  • Non-Resident Indian (NRI)
  • Any other person

It is important to note that only the donations made to prescribed funds qualify as a deduction. Also, this deduction is not available for those individuals who opt for the new regime.


What Type of Donations are Eligible for the Deduction Under Section 80G?

To claim a deduction under Section 80G, the donation must be in the form of money and not goods or services. The deduction can only be claimed for cash, cheque, or electronic transfer donations.

In addition, it is important to note that donations made in cash exceeding Rs. 2,000 will not be eligible for the deduction under Section 80G. Donors should ensure that they receive a receipt for the donation. The receipt should specify the amount donated, the name and address of the charitable institution or fund, and the registration number of the institution or fund under Section 80G.

Donors should also check the eligibility and maximum 80G deduction limit for each institution or fund before donating. It is important to note that the deduction limit and eligibility criteria can vary depending on the institution or fund to which the donation has been made.


How to Claim a Deduction Under Section 80G for Donations Made to Ayodhya Ram Mandir Trust?

People worldwide donated to the Ram Mandir through the Shri Ram Janmabhoomi Teerth Kshetra Trust, registered under Section 80G. This provision in the Indian Income Tax Act allows donors to claim deductions.

  • 50% of the amount donated for renovation/repair of the Mandir to Shri Ram Trust is eligible for deduction under Section 80G.
  • If the total amount donated to Shri Ram Trust exceeds 10% of your adjusted gross total income (GTI), any excess amount beyond the 10% limit will not be eligible for deduction.

Points to be noted while claiming deduction

  • Secure a valid Ram Mandir donation receipt from Shri Ram Trust.
  • Donations can be made via drafts, cheques, or online modes.
  • Cash donations exceeding INR 2,000 are not deductible.
  • In-kind donations are not accepted.
  • Donors opting for the new tax regime cannot claim benefits.
  • Contributions must be designated for temple renovation/repair to qualify for deductions.
  • Provide details of the donation in Schedule 80G of your ITR form.

Have more questions on how to claim the deduction on the money donated? Talk to our tax experts


How to Claim the Deduction Under Section 80G While Filing ITR?

Tax calculation or tax liability is computed on the net taxable income of the taxpayer. The net taxable income is calculated after subtracting all the deductions that a taxpayer is eligible for from his/her gross total income. This means that the deduction under Section 80G will be deducted from the gross total income. Gross income is the sum of income from all sources of income, such as salary, dividend income, capital gains, interest income, rental income, etc.

Now the question is how much amount of deductions can be claimed under Section 80G. This deduction ranges from 50% to 100% of the amount donated. Donations to certain institutions qualify for a full deduction of either 100% or 50% without any qualifying limit.

To claim the deductions under Section 80 G, one needs to provide the details of their donations in’ Schedule 80G” in the ITR form. Tables A, B, C, and D are included in the schedule. These tables each correspond to a different category of charitable institution.

As per the latest change, a new column has been added under ‘Table D’ of ITR forms where disclosure of the ARN (donation reference number) is required to be entered. This one is for those entities where a 50% deduction is allowed, subject to the qualifying limit.

Along with mentioning the information under ‘Schedule 80G’, it is important to separately mention the total amount of deduction claimed under Section 80G if the taxpayer is filling the ITR forms 2 and 3.

To claim the deduction under section 80G, you need to fill in the following details in the Income Tax Return -

  • Name of the Donee
  • PAN of the Donee
  • Address of the Donee
  • The amount and breakup of contributions are in cash and other mode.
  • The amount of deduction

These details are required to be mentioned in the various tables given in the ITR -

Table A - It is for the donations eligible for a 100% deduction without any qualifying limit.

List of donations eligible -

  • National Defence Fund by the Ce Central Government
  • National Illness Assistance fund
  • Prime Minister’s National Relief Fund
  • Fund by State Government for medical relief to poor
  • National Foundation for Communal Harmony
  • Zila Saksharta Samiti
  • Approved university or National institution of national importance
  • National/State Blood Transfusion Council
  • National sports and cultural funds
  • National Trust for Welfare of people with
  • Fund for technology development and application
  • Chief Minister’s relief fund
  • National children’s fund
  • Army Central Welfare fund
  • Chief minister’s earthquake relief fund
  • Prime Minister’s Armenia Earthquake Relief fund
  • Africa fund
  • Clean Ganga fund
  • National fund for control of drug abuse
  • Swacch Bharat Kosh

Table B - It is for donations eligible for a 50% deduction without any qualifying limit.

Donations eligible for deduction -

  • Prime Minister's Drought Relief Fund

Table C - It is for donations eligible for a 100% deduction with a qualifying limit.

Donations eligible for deduction -

  • Donors can contribute to government, local authorities, institutions, or associations for family planning initiatives.
  • Companies have the option to donate to the Indian Olympic Association or similar recognized organizations in India.
  • The purpose of these donations is to support the development of sports infrastructure or sponsor sporting events in India.

Table D - It is for donations eligible for a 50% deduction with a qualifying limit.

  • Any additional fund or institution meeting the criteria outlined in Section 80G(5) qualifies.
  • Donations to the government or local authorities can be used for charitable purposes, excluding family planning promotion.
  • Contributions can be made to Indian authorities dedicated to housing, urban development, or village enhancement.
  • Support can be extended to corporations specified in Section 10(26BB) aimed at advancing the interests of minority communities.
  • Funding is eligible for the repair or renovation of officially recognized religious sites like temples, mosques, gurudwaras, churches, and others.

Claiming deductions under Section 80G of the Income Tax Act can involve certain complexities, but with proper understanding and documentation, it can be done successfully. If you are facing issues while claiming a Section 80G deduction, our CAs can help you save taxes so you can keep more of what you earn. Tax2win tax experts are experienced professionals who can help individuals and businesses with various aspects of tax filing. Book Consultation Today!


What is “Adjusted Gross Total Income” for Tax Exemption Calculation Under 80G?

Adjusted Gross Total Income in this regard means the sum total of your income under all heads less the following amounts:

  • Amount deductible u/s 80C to 80U (but not Section 80G)
  • Income on which income tax is not payable
  • Long-term capital gains
  • Short-term capital gains under Section 111A
  • Income is referred to in Sections 115A, 115AB, 115AC, or 115AD.

What Documents are Required to Claim Tax Deduction Under Section 80G?

  • Receipt: To claim deduction u/s 80G, you need a donation receipt to back your claim. The receipt should provide details like Name, Address, PAN, registration number of the trust & the name of the donor, as well as the amount of donation and mode of payment.
  • Registration No. of Trust on Receipt: Every trust registered with the IT department u/s 80G has a Registration Number. It is mandatory to mention that number on the receipt. This registration is valid for a limited period only. Hence, the receipt must mention the registration number and the validity period.
  • Photocopy of 80G certificate: While getting a receipt, you should insist on a photocopy of the trust’s 80G registration certificate.

How Much Deduction is Allowed Under Section 80G?

For individuals, the deduction under Section 80G can be claimed on the amount donated to eligible institutions or funds up to a maximum of 50% or 100% of the donated amount, depending on the institution or fund to which the donation has been made.

For companies, the deduction under Section 80G can be claimed on the amount donated to eligible institutions or funds up to a maximum of 50% or 100% of the donated amount. However, it is important to note that the deduction limit for companies is subject to certain conditions and restrictions.

Additionally, this deduction under Section 80G can only be claimed by taxpayers who have opted for the old tax regime.


How to Calculate the Amount of Deduction Under Section 80G of the Income Tax?

Section 80G broadly categorizes donations under 2 categories. First, donations without any qualifying limit & second, donations with a qualifying limit.

These two categories further have sub-categories. You can refer to the diagram below for more clarity.

deduction under section 80G

*Maximum limit is known as the qualifying amount.

To calculate the amount of deduction under 80 G, follow these steps:

  • Check the category in which the fund/charitable institution falls (100% or 50% deduction with or without maximum/qualifying limit). We have given the complete list below for your reference.
  • When the payment is made to the first category, then there is no need for further calculations; just claim 100% or 50% of the donation amount subject to taxable income.
  • When payment is made to the second category, you need to find out the maximum/qualifying limit. The maximum/qualifying limit is 10% of the “adjusted gross total income.”
  • Now use this formula to arrive at the amount of deduction =
    a) Gross Qualifying limit = All donations made to Category 2
    b) Net Qualifying limit = This is 10% of the “adjusted gross total income.”
    c) Amount Deductible = 100%/50% of the donation amount subject to the net qualifying limit.

What is the Mode of Payment Under Section 80G?

Taxpayers in India can claim deductions under Section 80G for eligible donations. Here are the key modes through which donations can be made:

Cheque: Donations made via cheque are eligible for Section 80G deductions.

Demand Draft: Contributions made through demand drafts also qualify for Section 80G benefits.

Cash (for donations below Rs 2,000): Cash donations are accepted for deductions if they are below Rs 2,000.

Note: In-kind contributions such as food, material, clothes, medicines, etc., and donations exceeding Rs 2,000 should not be in cash to qualify for Section 80G deductions.


Criteria for Deductions:

Eligible Donations: Various donations specified in Section 80G are eligible for deductions.

Deduction Percentage: The deductions can be up to 100% or 50% with or without restrictions, as specified in Section 80G.


Example to Explain the Calculation of the Amount of Deduction Under Section 80G

Example: Mr. X, an individual, has income chargeable under the head salary of Rs.10,00,000 & a short-term capital gain of Rs.1,00,000. He makes the following investments & donations to save taxes.

Investment in NSCs & Tax saving FDRs Rs.150,000
Contribution to the National Defence Fund Rs.8,000
Clean Ganga Fund Rs.3,000
National Illness Assistance Fund Rs.7,000
National Cultural Fund Rs.15,000
Paid to State Government for Family Planning Rs.70,000
Paid to Approved Charitable Institutions Rs.60,000

Now, let’s see how Mr. X can claim deductions from various investments & donations made by him.

First of all, we will calculate Adjusted GTI as below:

Income from salary - 10,00,000
Income from short-term Capital Gain 1,00,000
Gross Total Income 11,00,000
Less: short-term capital gain -1,00,000
Less: Investment in NSCs -150,000
Adjusted GTI 8,50,000

As a next step, we will calculate the net qualifying Limit (i.e., 10% of INR 8,50,000) which comes to 85,000.

Further, we will classify the donations into two categories below:-

Without Qualifying Limit

Donation Made to Amt.
  1. National Defence Fund (100%)
  2. Clean Ganga Fund (100%)
  3. National Illness Assistance Fund (100%)
  4. National Cultural Fund (100%)
8,000
3,000
7,000
15,000
Total A (1+2+3+4) 33,000
With qualifying Limit
Donation Made to Amt.
(5) Paid to State Government for Family Planning (100% of 70,000) 70,000
(6) Paid to Approved Charitable Institution (50%of 60,000) 30,000
Total B (5+6) 1,00,000 (Restricted to 85,000 only)
Hence, deduction u/s 80 G will be limited to 1,18,000

Section 80G Deduction: Eligible List of Funds/Charitable Institutions for Donations

The prescribed funds and charitable institutions are divided into two categories:

Category 1: Donations where the deduction is available without any qualifying limit. This is further sub-categorized into funds with

  • 100% deduction without qualifying limit and
  • 50% deduction without qualifying limit

Category 2: Donations where the deduction is available subject to a qualifying limit. This is further sub-categorized into funds with

  • 100% deduction subject to qualifying limit and
  • 50% deduction subject to qualifying limit

List of donations eligible for 100% deduction without qualifying limit

National Defence Fund Prime Minister’s National Relief Fund Prime Minister’s Armenia Earthquake Relief Fund Africa (Public Contribution-India) Fund National Children’s Fund
National Foundation for Communal Harmony A university or any other educational institute of national eminence as may be approved by the prescribed authority. Maharashtra Chief Minister’s Earthquake Relief Fund Any fund set up by the State Government of Gujarat exclusively for providing relief to the victims of the earthquake in Gujarat Zila Saksharta Samiti constituted in Gujarat
National Blood Transfusion Council or State Blood Transfusion Council A fund set up by a State Govt. for the medical relief of the poor. Central Welfare Fund of the Army & Air Force or the Indian Naval Benevolent Fund National Illness Assistance Fund Chief Minister’s Relief Fund or Lieutenant Governor’s Relief Fund
National Sports Fund set up by the CG National Cultural Fund set up by the CG Fund for Technology Development and Application set up by the CG Andhra Pradesh Chief Minister’s Cyclone Relief Fund National Welfare Trust for persons with Autism, Cerebral Palsy, Mental retardation and multiple disabilities
Swachh Bharat Kosh (Available to all assessees) Clean Ganga Fund set up by the CG (Available to resident assessee) National Fund for Control of Drug Abuse

List of donations eligible for 50% deduction without qualifying limit

FUND NAME DEDUCTION ALLOWED
Prime Minister’s Drought Relief Fund 50%

List of donations eligible for 100% deduction subject to 10% of adjusted gross total income

FUND NAME DEDUCTION ALLOWED
Govt. or any approved local authority, institution, or association to be utilized for promoting family planning 100%
The Indian Olympic Association or any other notified association or institution for the development of infrastructure for the development of sports and games in India or sponsorship of sports and games (Note: this deduction is only available to companies) 100%

List of Donations eligible for 50% deduction subject to 10% of adjusted gross total income

FUND NAME DEDUCTION ALLOWED
Any other approved fund or institution which satisfies the conditions mentioned in section 80G(5) 50%
Govt. or any local authority, institution, or association to be utilized for any charity purpose other than the purpose of promoting family planning 50%
An authority constituted in India for the purpose of dealing with and satisfying the need for housing accommodation or for the purpose of planning the development of towns, villages, etc. 50%
A corporation specified in section 10(26BB) for promoting the interest of minority community 50%
Any notified temple, mosque, gurudwara, church, or other place notified by the CG (for renovation or repair) 50%

What is Section 80GG?

Section 80GGA of the Income Tax Act, 1961, provides a significant tax benefit for taxpayers in India. It allows for a 100% deduction on donations made towards specific scientific research and rural development initiatives.

Here's a breakdown of key points about Section 80GGA:

Eligible Donations:It covers donations made to:

  • Scientific research institutions are undertaking approved scientific research.
  • Universities or colleges for approved scientific research purposes.
  • Institutions approved by the government for use in scientific research.
  • Approved institutions or associations involved in rural development programs.
  • Research associations undertaking statistical or social science research or universities/colleges for such purposes.

Deduction Percentage: You can claim a deduction for the entire amount donated.

Payment Mode: Donations must be made through valid modes like cheques, drafts, or online transfers. Cash donations exceeding Rs. 2,000 are not eligible for deduction.

Who Can Claim: This deduction is available to all taxpayers except those with income from business or profession under the new tax regime (Section 115BAC).

Claiming the Deduction: To claim the deduction, you need a Form 58A certificate issued by the donee institution (the one receiving the donation). This certificate should confirm the donation and its eligibility under Section 80GGA.

Maximize your tax benefit with Section 80G deductions! Let Tax2win guide you through eligible causes and your charitable contributions for maximum tax savings. Get your consultation with our Online CAs and e-file your ITR for FY 23-24. Book eCA Now!


Frequently Asked Questions

Q- Can I claim an 80G through my employer?

Yes, you can claim a deduction u/s 80G through your employer. For that, you will need a certificate from the employer stating that such a donation has been made from your salary.


Q- Do I need to submit the receipt of my donation to claim a deduction under Section 80G?

No, you do not have to submit the receipt while filing an ITR. However, it is advised to keep it safe & handy so that it can be furnished in front of the Assessing Officer if required during the assessment.


Q- Is there any specific format for the 80G donation receipt? Where can I get the donation receipt?

The Income Tax Department issues no specific donation receipt format. The only requirement is to mention the trust name, address, registration number, PAN, donation amount in words and figures, date of donation, name of the donor, and mode of payment.

Also, the receipt should specify that the donation is eligible for deduction u/s 80G.
The donation receipt will be provided by the donee (Trust)


Q- What will be the payment proof in case the employer makes a donation through a consolidated cheque?

In this scenario, the deduction will be allowed based on a certificate issued by employers or DDO (Drawing and Disbursing Officer).


Q- Can I claim a tax deduction under 80G on all types of my income, like capital gains, salary income, rental income, etc?

Yes, you claim a deduction on all types of income except donations, which are subject to the qualifying limit.


Q- Can NRI claim a tax deduction under 80G for the donation made to Indian NGOs?

Yes, NRI can claim tax deduction for donations made to Indian NGO u/s 80G. Though the amount deposited should be in rupees, some trusts also accept the international currency. The policies differ from organization to organization.


Q- I submitted ITR and got a refund for this year. But I forgot to include the amount of 80G in ITR. In that case, is it possible to file a revised ITR and claim it now?

Yes, For Financial Year 2023-24 (Assessment Year 2024-25), you can claim deduction u/s 80G by filing a revised return on or before 31/12/2023.


Q- How the different donations can be categorized under Section 80G?

The donations under section 80G can easily be categorized into these four categories:

The available Deductions = 100% of the amount donated
The available Deductions = 50% of the amount donated
The available Deductions = 100% of the amount donated but the maximum upto the prescribed ceiling
The available Deductions = 50% of the amount donated but, maximum upto the prescribed ceiling


Q- How to check if the trust/organization to whom I would be donating gives 80G deductions?

Government-approved (registered) trusts/organizations are eligible for 80G deductions. You can easily check the registration of a trust/ organization through the Income Tax Website. Simply visit www.incometaxindia.gov.in & check for the trust/organization.


Q- How will the donations made in kind or for consideration other than money be dealt with under section 80G?

Under Section 80G of the Income Tax Act 1961 no tax benefit for donations made in kind like for clothes, articles, books, food, goods, etc.


Q- What shall be the payment mode for availing the benefit under Section 80G regarding the amount donated?

In case you wish to claim an income tax deduction benefit in respect of the amount you have donated to eligible institutions, you need to adhere to the following:

No deduction or income tax benefit shall be given for donations made in kind, such as donation of clothes, food, etc. No tax benefit for cash donations exceeding Rs 2000 shall be allowed to the taxpayer. The payment for a higher amount (exceeding Rs 2000) should be made through cheque, net banking, demand draft, or other banking channels.


Q- Can someone other than an individual claim benefits under Section 80G?

Yes, the income tax deduction under section 80G can also be claimed by a person other than individuals. It is also allowed for

  • HUF (Hindu Undivided Family)
  • Companies
  • Partnership Firms etc.

One of the most alluring points making this deduction an attractive tax-saving option is its availability to both Residents and Non-Residents.


Q- Is donation made to trusts like Akshay Patra, and SaveTheChildren, etc, eligible for Sec 80G tax benefit?

There are some well-known trusts across India where donations made are eligible for deduction u/s 80G. We’ve enlisted a few names for you as an example.

Trust Sec 80G Benefit
Akshay Patra 50% tax exemption
Cry.org 50% tax exemption
Save The Children 50% tax exemption
Give India 50% tax exemption

Q- How can I save tax by donating to NGO?

In case the NGO to which you have donated is eligible, then you can claim a tax benefit of 50% or 100% of the amount donated with or without a qualifying limit. But if the donation falls under the category subject to the qualifying limit, then the total deduction of such donations shall not cross 10% of adjusted gross total income.


CA Abhishek Soni
CA Abhishek Soni

Abhishek Soni is a Chartered Accountant by profession & entrepreneur by passion. He is the co-founder & CEO of Tax2Win.in. Tax2win is amongst the top 25 emerging startups of Asia and authorized ERI by the Income Tax Department. In the past, he worked in EY and comes with wide industry experience from telecom, retail to manufacturing to entertainment where he has handled various national and international assignments.

X