Section 80G Of Income Tax Act: Tax Deduction On Donations To Charity & Fund

Income Tax

Section 80G of Income Tax Act, 1961, allows an income tax deduction for donations made to charities and funds. Contributing funds for the welfare of society helps make a difference. Through Section 80G, the Government of India aims to encourage people to make charitable donations. 

If you have made such a donation, you can be eligible for a tax deduction. Read on to know all about Section 80G – provisions, eligibility criteria, how to claim a tax deduction and more. 

Provisions of Section 80G

As per this Section, people contributing money to charitable institutions and relief funds can claim 80G deduction. However, not every donation is considered for tax benefits. Only donations in prescribed funds are eligible for 80G deduction. Any taxpayer (firms, companies or individuals) can claim this benefit.  

Also Read: How To Use Online Income Tax Calculator?

Payment Mode for Claiming Tax Deduction Under Section 80G

An individual can claim a tax deduction under Section 80G when the contributions are made through cash, draft or cheque. Tax benefits are not available for in-kind donations such as medicines, clothes, materials and food. 

A cash donation above Rs. 2,000 does not qualify for an 80G deduction. To avail a tax reduction, donations exceeding Rs. 2,000 should be given in any form other than cash. The specified donations in Section 80G of the Income Tax Act qualify for a deduction of up to 50% or 100% with or without conditions.

How to Claim Deduction Under Section 80G?

To claim the tax benefit, individuals need to submit these details in their income tax returns:

• Donee’s name
• Donee’s PAN
• Address proof of the donee
• Contribution amount (breakup of donation in cash and other modes)
• Amount eligible for a reduction

Contributions Eligible for 100% Tax Deduction Under Section 80G

The donations which qualify for 100% tax deduction can be:

Without qualifying limit

• National Fund for Control of Drug Abuse
• Clean Ganga Fund
• National Sports Fund
• Swachh Bharat Kosh
• National Blood Transfusion Council or any State Blood Transfusion Council
• Africa (Public Contributions – India) Fund
• Prime Minister’s Armenia Earthquake Relief Fund
• Any exclusive fund provided by the Gujarat Government for contributing relief to the victims of Gujarat’s earthquake
• Chief Minister’s Earthquake Relief Fund (Maharashtra)
• The Maharashtra Chief Minister’s Relief Fund (October 6, 1993, and October 1, 1993)
• Andhra Pradesh Chief Minister’s Cyclone Relief Fund, 1996
• Fund for Technology Development and Application
• National Cultural Fund
• Lieutenant Governor’s Relief Fund or Chief Minister’s Relief Fund with respect to any Union Territory or State
• National Illness Assistance Fund   
• A State Government’s Fund to provide medical relief to the poor
• Zila Saksharta Samiti in any district under the district’s collector 
• National Trust for Welfare of Persons with Multiple Disabilities, Mental Retardation, Cerebral Palsy and Autism
• An approved educational institution/university of National eminence 
• National Foundation for Communal Harmony
• Central Government’s National Defence Fund
• National Relief Fund of the Prime Minister 

Subject to 10% of AGI (Adjusted Gross Income)

• Contribution by an entity to the Indian Olympic Association. Or any other prescribed institution or association for developing infrastructure for games and sports in the country, or the sponsorship of games and sports in India
• Contributions to the Government or any notified local authority, association or institution that promotes family planning   

Also Read: Income Tax Slabs And Rates

Contributions Eligible for 50% Tax Deduction Under Section 80G

The donations that are eligible for a 50% tax deduction can be:

Without qualifying limit

• Rajiv Gandhi Foundation
• Indira Gandhi Memorial Trust
• Drought Relief Fund of the Prime Minister
• Jawaharlal Nehru Memorial Fund

Subject to 10% of AGI (Adjusted Gross Income)

• For renovation or repairs of any notified church, gurudwara, mosque, temple, or other places
• Any corporation mentioned in Section 10(26BB) to promote the minority community’s interest
• Any authority in India that satisfies the requirement for housing accommodation or that deals with improving, developing and planning villages, towns, cities or both.
• A local authority or Government that offers charitable services other than the promotion of family planning
• Any other institution or fund that satisfies the conditions specified in Section 80G(5)

Illustration of Tax Benefit Under Section 80G Of Income Tax Act

The tax 80G deduction is based on the tax slab of an individual. For example, Mrs Agarwal is an individual who donates Rs. 1.6 lakh to an NGO. Her total income for the year 2020-2021 is Rs. 7 lakhs. The taxation is shown in the table below:

Documents Required to Claim Tax Deduction under Section 80G

Here’s a list of documents required to claim tax deduction under section 80G:

• Receipt of the donation – Name of the Trust, Address, PAN Card, donation amount and name of the donor. 
• Form 58 from the Trust.
• Photocopy of 80G certificate from the Trust.
• Registration number of the Trust.

What is Section 80GGA?

Section 80GGA ensures deductions for donations towards rural development or scientific research. This 80G deduction is applicable to all assesses other than those who have an earning or loss from a profession and/or a business.

Contributions can be made in the form of cash, draft or cheque. However, cash donations exceeding Rs. 2,000 are not eligible for tax benefits. 100% of the donation amount qualifies for deductions.

Contributions Eligible Under Section 80GGA

• Specified National Poverty Eradication Fund
• Prescribed Fund for Afforestation 
• Specified Rural Development Fund
• Local authority or public sector company or an approved institution or association that carries out schemes or projects eligible under Section 35AC
• Approved institution or association which conducts training of person(s) to implement rural development programs
• Approved institution or association which conducts any rural development programme and is eligible under Section 35CCA 
• Research association which conducts statistical research or social science research, or a university, college or any other institution utilised for a similar purpose− approved under Section 35(1)(iii)

Final Word

The Government of India extends its support for noble causes through Section 80G of the Income Tax Act. Both non-resident and resident individuals can claim the tax deductions under this provision. The deductible expenses under Section 80GGA cannot be eligible for other tax benefits. 

FAQs on Section 80G

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