Section 80G - Donations Eligible Under Section 80G

Contributing to charitable causes is a noble act, and the Indian government encourages such contributions by offering tax benefits under Section 80G of the Income Tax Act. This section provides taxpayers the ability to claim deductions for donations made to specific funds and charitable institutions. Here's an in-depth guide to understanding Section 80G and related provisions under Section 80GGA.

What Is Section 80G?

Section 80G allows individuals, companies, and other entities to claim tax deductions on donations made to eligible relief funds, charities, and institutions. These deductions can significantly reduce the taxable income, encouraging citizens to contribute to societal welfare.

Latest Updates

As per Budget 2023, donations to the following funds are no longer eligible for deductions under Section 80G:

• Jawaharlal Nehru Memorial Fund
• Rajiv Gandhi Foundation
• Indira Gandhi Memorial Trust

Eligibility to Claim Deductions Under Section 80G

Tax deductions under Section 80G can be claimed by:

• Individuals (including NRIs)
• Companies
• Hindu Undivided Families (HUFs)
• Firms

Note: Deductions under Section 80G are not available if the taxpayer opts for the new tax regime under Section 115BAC.
 

Mode of Payment

To claim deductions under Section 80G, donations must be made through specific payment modes:

• Cheque
• Demand Draft
• Cash (only for amounts below ₹2,000)

Ineligible Contributions

• Donations above ₹2,000 made in cash.
• Contributions in-kind (e.g., food, clothing, medicines).
   

Types of Deductions Under Section 80G

Donations under Section 80G are classified into three categories based on the percentage of deductions and qualifying limits:

Donations Eligible for 100% Deduction Without Qualifying Limit Under Sections 80G and 80GGA

The following donations qualify for a 100% deduction without any qualifying limit:

• Contributions to approved organizations in India.
• Donations to political parties or electoral trusts in India.
• Contributions to government-established funds like the National Defence Fund or the National Foundation for Communal Harmony.
• Donations to the Prime Minister's National Relief Fund or funds created by state governments or local authorities.
• Donations to approved universities, higher education institutions, or research organizations.
• Contributions to approved hospitals or the National Illness Assistance Fund.
• Donations to charitable or religious trusts, welfare funds for armed forces personnel, or institutions supporting disabled individuals.
• Contributions to institutions or funds established as war memorials, for family planning, or scientific research.
• Donations to educational or rural development funds approved by the government.

Donations Eligible for 50% Deduction Without Qualifying Limit

The following donations qualify for a 50% deduction:

• Contributions to approved funds or charitable institutions registered with the Central Government.
• Donations to family planning funds or trusts for charitable purposes established in India.
• Contributions to notified universities, research institutions, and hospitals.
• Donations to trusts supporting Scheduled Castes, Scheduled Tribes, or charitable purposes outside India (if approved).
• Donations to public sector funds for charitable initiatives.

Note: Starting FY 2023–24, donations to the Jawaharlal Nehru Memorial Fund, Rajiv Gandhi Foundation, and Indira Gandhi Memorial Trust are no longer eligible for deductions. However, contributions to the Prime Minister's

Drought Relief Fund remain deductible

• Donations Eligible for 100% Deduction Subject to 10% of Adjusted Gross Total Income
• The following are deductible up to 10% of the adjusted gross total income:
• Donations to the Prime Minister's National Relief Fund.
• Contributions to state or central funds for victims of natural calamities or medical relief.
• Donations to approved institutions for social science research, statistical studies, or sports training.
• Contributions to National Defence Funds or trusts for the welfare of disabled persons.
• Donations to family planning funds or trusts.
   

How to Claim Deductions Under Section 80G

To claim deductions:

a. Include donation details in your Income Tax Return (ITR):

• Name of the recipient.
• PAN of the recipient.
• Address of the recipient.
• Donation amount (cash and non-cash breakdown).

b. Mention the amounts in the appropriate ITR tables:

• Table A: 100% deduction without a limit.
• Table B: 50% deduction without a limit.
• Table C: 100% deduction subject to a limit.
• Table D: 50% deduction subject to a limit.
   

Documents Required to Claim Deductions

Ensure you have the following documents:

• Donation receipt with details such as donor’s name, donation amount, and recipient’s PAN.
• Registration number of the trust or fund as issued by the Income Tax Department.

Benefits of Section 80G Deductions

For All Taxpayers

• 50% deduction without a limit for specific donations.
• 100% deduction on certain donations, subject to 10% of adjusted gross income.

For Senior Citizens

• Additional deductions for interest income on deposits.

For Women

• Deductions on rent paid without House Rent Allowance (HRA).
• Medical expense deductions for specified illnesses.
   

What Is Section 80GGA?

Section 80GGA focuses on donations for scientific research and rural development, applicable to all taxpayers except those with income from business or profession.

Eligible Donations

• Donations to research associations for:
• Scientific research.
• Statistical research.
• Donations to approved associations for rural development programs.
• Mode of Payment: Donations above ₹2,000 must be made through cheque, draft, or other non-cash modes to qualify.
   

Adjusted Total Income

Adjusted gross total income is calculated by reducing the following from gross total income:

• Deductions under Sections 80C to 80U (excluding 80G).
• Exempt income.
• Long-term and short-term capital gains.
   

Conclusion

Section 80G not only encourages philanthropy but also allows taxpayers to enjoy financial benefits. Planning your donations wisely and maintaining proper documentation can help maximize your savings while contributing to meaningful causes. Always consult a tax expert for personalized guidance.