India is a country where people generously donate and contribute towards social causes. Such donation are given in cash as well as in kind. Donations are given to various government notified funds, charitable institutions, NGOs, religious bodies etc. Section-80G of the Income Tax Act, 1961 provides for deduction in respect of such donations made by the taxpayers. We will discuss in detail about the provisions of Section-80G in this article.
Who is eligible to claim deduction under section-80G??
- Benefit of Section-80G can be availed by all types of assessees whether Individual, HUF, Firm, LLP, Companies etc.
- Even Non-Resident assessees can also claim deduction under section-80G.
What are the type of eligible donations under section-80G??
- Section-80G allows deduction towards donation/contribution made only to notified funds and to those charitable institutions which are approved by the Commissioner of Income Tax.
- Therefore, before making donation with an intention to claim benefits u/s 80G, you must first check whether charitable institution/fund is notified for this purpose or not. You may visit the following link to check status of exempted charitable institution:- https://www.incometaxindia.gov.in/Pages/utilities/exempted-institutions.aspx
What is the prescribed mode of payment under section-80G??
- Donation can be given in cash or by cheque or draft.
- However, donations in cash should not be more than Rs. 2,000, otherwise no deduction will be allowed.
- Further, contributions made in kind namely food items, medicines etc. are not eligible for deduction under this section.
- Deduction is available only on payment basis on or before 31st March of every financial year.
- However, for the F.Y. 2019-20, deduction shall be available for donation made up to 31st July 2020 owing to Covid-19 conditions by virtue of "Taxation and other Laws (Relaxation of Certain Provisions) Ordinance, 2020".
How can you claim deduction under section-80G??
- You must obtain a Donation Receipt from the concerned charitable institution (Donee) containing name of the institution, PAN, address and details of 80G registration given by Commissioner of Income Tax.
- While filing ITR, following details are to be filled in appropriate columns in ITR:-
(a) Name of Charitable Institution/ Fund
(b) Complete Address with Pincode
(c) PAN of the Charitable Institution
(d) Amount of Donation/ Contribution
What is the quantum of deduction allowed under section-80G??
The quantum of deduction allowed under section-80G shall depend on the type of charitable institution/ fund in which donation or contribution has been made. Section-80G prescribes 2 categories for classifying donations for this purpose:-
(a) 50% or 100% deduction without any qualifying limit
(b) 50% or 100% deduction with qualifying limit
First we will discuss category (a) where there is no qualifying limit for deciding amount of deduction. You can make any amount of donation in category (a) and claim deduction of such amount under section-80G.
Deduction without any qualifying limit:-
In this category, there is no restriction on the quantum of deduction. The taxpayer can claim 100% or 50% of the donation amount as deduction under section-80G. You can make donation to following funds for claiming deduction under section-80G to the extent of 100% or 50% without any qualifying limit:
| Name of the fund | Deduction limit | Name of the fund | Deduction limit |
| National Defence Fund | 100% | Prime Minister's National Relief Fund | 100% |
| Prime Minister's Armenia Earthquake Relief Fund | 100% | Africa (Public Contributions-India) Fund | 100% |
| National Chidren's Fund | 100% | National Foundation for Communal Harmony | 100% |
| An approved university/ educational institution of national eminence | 100% | Maharashtra CM's Relief Fund (during 1-10-93 and 06-10-93) | 100% |
| Maharashtra CM's Earthquake Relief Fund | 100% | Any fund set up by Government of Gujarat for providing relief to earthquake victims in Gujarat | 100% |
| Zila Saksharta Samiti | 100% | National Blood Transfusion Council and State Council for Blood Transfusion | 100% |
| Fund set by a State Government for medical relief to poor | 100% | Andhra Pradesh CM's Cyclone Relief Fund | 100% |
| Central Welfare Fund of the Army and Air Force and the Indian Naval Benevolent Fund | 100% | National Illness Assistance Fund | 100% |
| CM's Relief Fund or Lieutenant Governor's Relief Fund | 100% | National Sports Fund | 100% |
| National Cultural Fund | 100% | Fund for Technology Development and Application | 100% |
| Clean Ganga Fund | 100% | National Fund for control of Drug Abuse | 100% |
| Swachh Bharat Kosh | 100% | National Trust for welare of persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities (Applicable for AY 2002-03) | 100% |
| Any trust, institution or fund to which section-80G(5) applies for providing relief to the victims of earthquake in Gujarat (Not relevant now) | 100% | PM Cares Fund | 100% |
| Prime Minister's Drought Relief Fund | 50% | Indira Gandhi Memorial Trust | 50% |
| Rajiv Gandhi Foundation | 50% | Jawahar Lal Nehru Memorial Fund | 50% |
Deduction subject to qualifying limit:
In this category, deduction for donations is available up to 100% or 50% of the amount donated but subject to a prescribed Net Qualifying Limit on the income of the taxpayer. Net Qualifying Limit refers to the:-
(a) 10% of Adjusted Gross Total Income (AGTI) Or
(b) Amount of Donation made (excluding donations as given in the table above), whichever is less
Calculation of Adjusted Gross Total Income:-
| Gross Total Income (Total Income under all heads before deductions) Less: Deductions under section-80C to 80U (except section-80G) Exempt Income Long Term Capital Gains Short Term Capital Gains on sale of shares u/s 111A Income referred to in section 115A, 115AB, 115AC & 115D in relation to non-residents & foreign companies |
xxx (xxx) (xxx) (xxx) (xxx) (xxx) |
| Adjusted Gross Total Income | xxx |
Deduction allowable under Section-80G shall be:-
50% or 100% of {(10% of Adjusted GTI) or (Amount of Donation), whichever is less} or we can say 50% or 100% of Net Qualifying Limit
Now, we are putting down the list of funds/ institutions which are eligible u/s 80G for deduction of 50% or 100% of net qualifying amount:
| Name of the fund/institution | Deduction limit | Name of the fund/ institution | Deduction limit |
| Donation to Goverrnment or any approved local authority, institution or association to be utilised for the purpose of promoting family planning | 100% of Net Qualifying Amount | Donation by a Company to Indian Olympic Association or 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 | 100% of Net Qualifying Amount |
| Donation to Government or any local authority to be utilised for any charitable purpose other than for promoting family planning | 50% of Net Qualifying Amount | Any authority constituted in India for the purpose of dealing with and satisfying the need for housing accomodation or for the purpose of planning/ development of towns, villages etc. | 50% of Net Qualifying Amount |
| Any corporation specified in section 10(26BB) for promoting interest of minority community | 50% of Net Qualifying Amount | Any notified temple, mosque, gurdwara, church or other place (for renovation or repair) | 50% of Net Qualifying Amount |
| Any other fund or any institution which satisfies conditions mentioned in Section-80G(5) | 50% of Net Qualifying Amount |
Other Technical issues under section-80G:
- Proof of payment must be submitted to assessing officer where the assessee is asked to do so. A stamped receipt shall be sufficient as a proof of payment made for claiming deduction under this section. However, simply because a receipt which is produced before the Assessing Officer is defective (not affixed with revenue stamps), it does not automatically invalidate the donation itself.
- Circular No. 2/2005, dated 12 Jan. 2005:- Where donations are made to the National Defence Fund, The Army Central Welfare Fund, Indian Naval Benevolent Fund, Air Force Central Welfare Fund, National Relief Fund, The Chief Minister's Relief Fund or the Lieutenant Governor's Relief Fund, through the employer by a consolidated cheque, deduction will be available on the basis of certificate issued by DDO/employer in this behalf.
- Donation to Clean Ganga Fund by a non-resident is not eligible for deduction under section-80G.
- Contribution to PM Cares Fund is qualified as CSR expenditure under Item No. (VIII) of Schedule-VII of the Companies Act, 2013- Office Memorandum F.No. CSR-05/1/2020-CSR-MCA dated 8th March, 2020.
- Donation to Swachh Bharat Kosh and Clean Ganga Fund is eligible for deduction under section-80G only if the amount is not spent by the assessee in pursuance of Corporate Social Responsibility (CSR) under section 135(5) of the Companies Act, 2013.
Deduction under section-80G in respect of F.Y. 2019-20 shall be available even if the donation is made upto 31st July 2020 owing to Covid-19 conditions by virtue of "Taxation and Other laws (Relaxation of certain provisions) Ordinance, 2020".
