Section 80G of the Income Tax Act allows a deduction for any contribution made to certain relief funds and charitable institutions. This deduction can be claimed by individuals, HUFs, and businesses. However, not all donations are eligible for deductions under section 80G. Only donations made to prescribed funds by the government of India qualify as a deduction.
Deduction under section 80G is not allowed for Financial Year 2020-21 if the taxpayer opts for the new tax regime
Tip
Deduction under section 80G is not allowed for Financial Year 2020-21 if the taxpayer opts for the new tax regime
How to Claim Deduction Under Section 80G?
Section 80G is available to all types of taxpayers. Even the mode of payment is an important thing while considering deductions. The deductions can only be claimed when the mode of payment is Cheque or Draft or Cash. However, donations made in cash that are exceeding INR 2000 will not be deductible. Similarly, other materials such as food, clothes, or medicines are not eligible for deductions under Section 80G.
In order to claim the deduction under Section 80G for a contribution, one needs to submit the following details:
Name of Donee
PAN of Donee
Address of Donee
Amount Donated
Eligibility for Deduction Under Section 80G
Tax Deduction on Donation
List of Funds Eligible for Deduction Under Section 80G
Donations with 100% Income Tax Deduction without any qualifying limit:
National Defense 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 the medical relief to the poor
National Illness Assistance Fund
National Blood Transfusion Council or to any State Blood Transfusion Council
Fund for Technology Development and Application
National Sports Fund
National Cultural Fund
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
National Children’s Fund
Chief Minister’s Relief Fund or Lieutenant Governor’s Relief Fund with respect to any State or Union Territory
National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation, and Multiple Disabilities
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 during January 26, 2001, and September 30, 2001) or
Prime Minister’s Armenia Earthquake Relief Fund
Africa (Public Contributions — India) Fund
Swachh Bharat Kosh (applicable from the financial year 2014-15)
Clean Ganga Fund (applicable from the financial year 2014-15)
National Fund for Control of Drug Abuse (applicable from the financial year 2015-16)
Donations with 50% Income Tax Deduction without any qualifying limit:
Jawaharlal Nehru Memorial Fund
Prime Minister’s Drought Relief Fund
Indira Gandhi Memorial Trust
The Rajiv Gandhi Foundation
Donations with 100% Income Tax Deduction subject to qualifying limit of 10% of adjusted gross total income:
Government or any approved local authority, institution or association to be utilized for the purpose of promoting family planning
Donation by a Company to the Indian Olympic Association or to any other notified association or institution established in India for the development of infrastructure for sports and games in India or the sponsorship of sports and games in India
Donations with 50% Income Tax Deduction subject to qualifying limit of 10% of adjusted gross total income
Any other fund or any institution which satisfies conditions mentioned in Section 80G(5)
Government or any local authority to be utilized for any charitable purpose other than the purpose of promoting family planning
Any authority constituted in India for the purpose of dealing with and satisfying the need for housing accommodation or for the purpose of planning, development or improvement of cities, towns, villages or both
Any corporation referred in Section 10(26BB) for promoting the interest of minority community
For repairs or renovation of any notified temple, Mosque, Gurudwara, Church, or another place
The taxpayer needs to calculate Adjusted Gross Total Income for donation made to charity/Trust which is subject to the qualifying limit. For calculating “Adjusted Gross Total Income” one needs to first calculate the gross total income earned from all the sources, and subtract the following from it:
All the Chapter VI-A Deductions except 80G,
Exempt Income,
Short Term Capital Gains taxed @15% u/s 111A,
All Long Term Capital Gains,
Income referred to in Sections 115A, 115AB, 115AC, 115AD relating to non-residents and foreign companies.
ITR Form Applicable for Section 80G
The taxpayer can claim deductions u/s 80G while filing ITR if all the above-mentioned conditions are full-filled. Individuals/HUFs can claim 80G in any of the ITR forms, i.e, ITR 1, ITR 2, ITR 3, and ITR 4 depending upon their income sources. The due date for filing ITR is 31st July of the next FY if the tax audit is not applicable.
Supporting Documents
Apart from the usual documents such as PAN and Form 16, we need to file the Income Tax Returns, you will require the following documents:
Stamped Receipt: A stamped receipt for the donations made. Whenever a donation is made towards a fund or a trust, they must give a receipt. Keep it safe, and submit it while filing tax to get an exemption for the amount. The receipts should contain the stamp of the organization, name, date, and PAN
Form 58: For donations made towards funds with 100% exemptions, a Form 58 from the organization is also necessary
FAQs
Can I claim deduction for a donation made in cash for Rs. 25,000
As per the Income Tax Act, any contribution made by cash in excess of Rs. 10,000 will not be allowed as deduction u/s 80G. So you can claim a maximum deduction of Rs. 10,000 for cash donations.
What is the limit for deductions allowed u/s 80G?
There is no upper limit set under section 80G for claiming a deduction for donations made to charitable organizations. As long as you have taxable income to claim a deduction from, there is no limit on the amount of deduction to be claimed u/s 80G.
Can I claim a deduction for a donation made through cheque worth Rs. 50,000?
Yes, you can. There are no limits for contributions made through cheques.
There are a wide range of deductions that you can claim. Apart from Section 80C tax deductions, you could claim deductions up to INR 25,000 (INR 50,000 for Senior Citizens) buying Mediclaim u/s 80D. You can claim a deduction of INR 50,000 on home loan interest under Section 80EE.
Hey @Dia_malhotra , there are many deductions that you can avail of. Your salary package may include different allowances like House Rent Allowance (HRA), conveyance, transport allowance, medical reimbursement, etc. Additionally, some of these allowances are exempt up to a certain limit under section 10 of the Income Tax Act.
For eg,
Medical allowance is exempt up to INR 15,000 on a reimbursement basis.
Children education allowance is exempt up to Rs. 200 per child per month up to a maximum of two children.
Conveyance allowance is exempt up to a maximum of Rs. 1600 per month.
Tax on employment and entertainment allowance will also be allowed as a deduction from the salary income. Employment tax is deducted from your salary by your employer and then it is deposited to the state government.
The benefit Section 80EEB can be claimed by individuals only. An individual taxpayer can claim interest on loan of an electric vehicle of up to INR 1.5 lacs u/s 80EEB. However, if the electric vehicle is used for the purpose of business, the vehicle should be reported as an asset, loan should be reported as a liability and the interest on loan can be claimed as a business expense irrespective of the amount. (We have updated the article with the changes).
Thus, if you have a proprietorship business, you should claim interest amount as a business expense only if the vehicle is used for business purpose. However, if it is used for personal purpose, you can claim deduction of interest u/s 80EEB in your ITR since you would be reporting both personal and business income in the ITR (under your PAN).
As per the Income Tax Act, the deduction under Section 80EEB is applicable from 1st April 2020 i.e. FY 2020-21.
Hey @Sharath_thomas , we have updated the content according to the appropriate assessment year. Thanks for the feedback.
In case of capital gain income (LTCG/STCG), transfer expenses are allowed as deduction, except STT.
However, in case of business income (F&O, intraday), all expenses incurred for the business (including STT) are eligible to claim deduction in ITR.
Hope, it helps!
Hello,
Is it possible to claim deductions under S. 80CCF for Infra bonds bought in the secondary market and held to maturity?
There were a number of 10 year infra bonds issued in the 2010- 2013 period, which will start maturing soon. These are all listed on the exchanges (although hardly any liquidity or transactions in them). If I were to buy some of these bonds in the open markets and hold them in my demat to maturity (<3 years), is it possible to claim tax deductions (upto 20k per year) under 80CCF for buying?
I couldn’t find anything on this. Any help is appreciated.
Yes you can claim deduction under 80CCF for investment made in specified infrastructure and other tax saving bonds bought in the secondary market and held to maturity.
Deduction under Section 80CCF can be availed only through investment in certain tax saving bonds, issued by banks or corporations after gaining permission from the government which shall be restricted upto 10,000 per year.
These bonds are generally long term bonds, having tenure of more than 5 years with a lock in period of 5 years in most of the cases. These bonds can be sold after the lock in period!
Also, interest earned on these bonds will be taxable.
Hope this helps!
Hey @Sheirsh_Saxena, yes, the investment amount needs to be added under 80C.
Hey @sushil_verma
There are a wide range of deductions that you can claim. Apart from Section 80C tax deductions, you could claim deductions up to INR 25,000 (INR 50,000 for Senior Citizens) buying Mediclaim u/s 80D. You can claim a deduction of INR 50,000 on home loan interest under Section 80EE.
Hey @Dia_malhotra , there are many deductions that you can avail of. Your salary package may include different allowances like House Rent Allowance (HRA), conveyance, transport allowance, medical reimbursement, etc. Additionally, some of these allowances are exempt up to a certain limit under section 10 of the Income Tax Act.
For eg,
Tax on employment and entertainment allowance will also be allowed as a deduction from the salary income. Employment tax is deducted from your salary by your employer and then it is deposited to the state government.
The benefit Section 80EEB can be claimed by individuals only. An individual taxpayer can claim interest on loan of an electric vehicle of up to INR 1.5 lacs u/s 80EEB. However, if the electric vehicle is used for the purpose of business, the vehicle should be reported as an asset, loan should be reported as a liability and the interest on loan can be claimed as a business expense irrespective of the amount. (We have updated the article with the changes).
Thus, if you have a proprietorship business, you should claim interest amount as a business expense only if the vehicle is used for business purpose. However, if it is used for personal purpose, you can claim deduction of interest u/s 80EEB in your ITR since you would be reporting both personal and business income in the ITR (under your PAN).
As per the Income Tax Act, the deduction under Section 80EEB is applicable from 1st April 2020 i.e. FY 2020-21.
Hey @Sharath_thomas , we have updated the content according to the appropriate assessment year. Thanks for the feedback.
No issues. You’re welcome!
Hey @shindeonkar95
In case of capital gain income (LTCG/STCG), transfer expenses are allowed as deduction, except STT.
However, in case of business income (F&O, intraday), all expenses incurred for the business (including STT) are eligible to claim deduction in ITR.
Hope, it helps!
Hello,
Is it possible to claim deductions under S. 80CCF for Infra bonds bought in the secondary market and held to maturity?
There were a number of 10 year infra bonds issued in the 2010- 2013 period, which will start maturing soon. These are all listed on the exchanges (although hardly any liquidity or transactions in them). If I were to buy some of these bonds in the open markets and hold them in my demat to maturity (<3 years), is it possible to claim tax deductions (upto 20k per year) under 80CCF for buying?
I couldn’t find anything on this. Any help is appreciated.
Hello @Veejayy,
Yes you can claim deduction under 80CCF for investment made in specified infrastructure and other tax saving bonds bought in the secondary market and held to maturity.
Deduction under Section 80CCF can be availed only through investment in certain tax saving bonds, issued by banks or corporations after gaining permission from the government which shall be restricted upto 10,000 per year.
These bonds are generally long term bonds, having tenure of more than 5 years with a lock in period of 5 years in most of the cases. These bonds can be sold after the lock in period!
Also, interest earned on these bonds will be taxable.
Hope this helps!
Hey @Sheirsh_Saxena, yes, the investment amount needs to be added under 80C.