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.
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, the cash payment exceeding INR 10,000 is not 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
- Chief Minister’s Earthquake Relief Fund, Maharashtra
- 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
What is Adjusted Gross Total Income under 80G?
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.
- 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
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.
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.
Yes, you can. There are no limits for contributions made through cheques.