Section 80GGA: Deduction for Donation for Scientific Research & Rural Development

What is Section 80GGA?

Section 80GGA allows 100% tax deduction on the donations made towards specific scientific research and rural development projects. In order to qualify for this deduction, the donation must be made to specified entities approved by the prescribed authority for the purposes of rural development or scientific research.

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What are the Modes of Donations that are Eligible for Exemption under Section 80GGA?

Donations can be made through cheque, cash, or draft. 100% of the amount donated or contributed is eligible for deductions however, any cash donation above Rs 2,000 is not allowed for deduction under this section.

Note: Contributions made in kind, such as food, medicines, material, clothes, and donations exceeding Rs.2000 in cash, they do not qualify for deduction under section 80G.

Donations or contributions made above Rs. 2000 can be made in any mode other than cash to qualify for section 80GGA deduction.

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Which Donations are Eligible under Section 80GGA?

The following donations are eligible for deductions under section 80GGA -

Donations to Scientific Research Institution

• Contributions made to any institution engaged in scientific research.
• The institutes should be approved by the prescribed authority under section 35(1)(iii) or Section 35(1)(ii).

Donations to Universities and Colleges

• Donations to any university/college/institution wholly engaged in scientific research.
• Such institutions must be notified and approved for the purpose of TDS under section 80GGA.

Donations to Research Associations

• Contributions to research institutions that are carrying out scientific research.
• These institutions must be approved under sections 35(1)(ii) and 35(1)(iii).

Donations to Rural Development Projects

• Any amount donated or contributed to any institution or association carrying on any rural development program.
• The mentioned association must be approved by the National Committee for rendering their service or introducing any scheme or project for rural development under Section 35CCA.

Donation to Association or Institution for Statistical Research and Social Science

Contributions made to associations carrying on research in statistical research and social science.

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Important Certificate for Claiming Deduction under Section 80GGA

The taxpayer is required to furnish a certificate named as Form 58A from the payee under Rule 110 of the Income Tax Rules, 1962. This certificate contains all the information related to the amount paid by the assessee in the previous year to any local authority, public sector company, or any institution approved by the national committee for carrying out a scheme or project.

The certificate should be furnished by the association to the following effect:

• The programme should involve work for any construction of a structure or a building or laying out road or boring a well. The structure should be used as a school, welfare centre or dispensary and so on. The work may also involve installation of machinery or plant. All these work should be commenced before 1st of March, 1983.
• Any programme of rural development approved by the prescribed authority commenced before 1st of March, 1983.

In case the institution where the donation is done is involved in training of persons, the certificate must be attested with the following information intact:

• The association to whom donation is given must be approved by the authority before 1st March, 1983.
• The training of persons for any project for rural development should be commenced by the institution before 1st March, 1983.

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Benefits of Donating Under Section 80GGA

• Tax Savings: Reduces your taxable income by accepting deduction for qualifying donations.
• Scientific & Rural Initiatives Support: Fosters the developscientific research and rural development programs in India.
• Fosters Social Responsibility: Encourages individuals and companies to contribute to socially useful causes by providing monetary donations.

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Documents Required for Claiming Tax Exemption under Section 80GGA

• Donation Receipt: It should be issued by the recipient institution as an acknowledgment of receiving your donation or contribution. It should consist of the institution’s registered name, donation amount, taxpayer’s name, and the registration number provided by the Income Tax Department.
• Form 58A: This certificate is crucial for claiming 100% deduction for the donation made. It should be issued by the donee and consist of details such as name, PAN, donation amount, and confirmation of the program/project.
• Proof of Payment: While it’s not mandatory, it's important to maintain records of your donation payment, especially if it involves a significant amount.

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Conditions for Claiming Deduction under Section 80GGA

Here are the conditions that you need to follow for claiming deduction under section 80GGA -

• Donations exceeding ₹10,000 should be made in non-cash modes (such as cheque, bank transfer, etc.).
• This deduction is not available to individuals who earn their income from business or profession.
• Once a deduction is availed for a donation in an assessment year, it cannot be availed in any subsequent year.
• The donation should be given to an organisation approved by the prescribed authority for science research or rural development.
• Contributions in kind (non-monetary) cannot be claimed as deductions under this section.

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Difference between Section 80G and Section 80GGA

As a fact Section 80GGA is a subsection of Section 80G of the IncomeTax Act. But there is a major difference between both the sections. The difference is as follows:

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