donation under section 80g and 80gga

Many of us have contemplated donating to charity and doing our bit for society. Given the nobility of this gesture, the government extends its full support towards charitable services and provides tax deductions on the donated amount. Section 80G of the Indian Income Tax Act allows a tax deduction for contributions to certain relief funds and charitable institutions. Thus, you can claim tax deductions in Section 80G apart from Section 80C and save maximum taxes.

Latest Updates

Budget 2023 provided that donations made to the following funds will not be eligible for any deductions under 80G:

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

Eligibility to Claim Deduction Under Section 80G

The following taxpayer can claim a deduction under this section: 

• Individuals 
• Companies 
• Firms 
• Hindu Undivided Firm (HUF)
• Non-Resident Indian (NRI)
• Any other person

However, all donations are not eligible for deductions under Section 80G. Only donations made to prescribed funds qualify as a deduction. 

Note: This deduction is not available if an individual taxpayer opts to pay taxes under the new tax regime (115BAC).

What is the Mode of Payment Under Section 80G?

Section 80G deductions can be claimed by taxpayers when they make donations through the following modes:

• Cheque 
• Demand draft 
• Cash (for donations below Rs 2,000)

Note: In-kind contributions such as food, material, clothes, medicines etc., and donations of above Rs 2,000 in cash they do not qualify for deduction under Section 80G. Donations above Rs 2,000 should be made in any mode other than cash to qualify under Section 80G.

The various donations specified in Section 80G are eligible for a deduction of up to 100% or 50% with or without restriction, as provided in Section 80G. 

How to Claim the Deduction Under Section 80G?

To be able to claim this deduction, the following details have to be submitted in your income tax return:

• Name of the donee
• PAN of the donee
• Address of the donee
• Amount of contribution – the breakup of contribution in cash and another mode
• The amount eligible for deduction

The above details need to be mentioned in the respective tables given in the ITR.

• Table A: For donations entitled to 100% deduction without qualifying limit
• Table B: For donations entitled to 50% deduction without qualifying limit
• Table C: For donations entitled to 100% deduction subject to qualifying limit
• Table D: For donations entitled to a 50% deduction subject to the qualifying limit

List of Donations Eligible for 100% Deduction without Qualifying Limit

• National Defence 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 medical relief to the poor
• National Illness Assistance Fund
• National Blood Transfusion Council or any State Blood Transfusion Council
• National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation, and Multiple Disabilities
• National Sports Fund
• National Cultural Fund
• Fund for Technology Development and Application
• National Children’s Fund
• Chief Minister’s Relief Fund or Lieutenant Governor’s Relief Fund with respect to any State or Union Territory
• 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
• 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 between January 26, 2001, and September 30, 2001)
• Prime Minister’s Armenia Earthquake Relief Fund
• Africa (Public Contributions – India) Fund
• Swachh Bharat Kosh (applicable from FY 2014-15)
• Clean Ganga Fund (applicable from FY 2014-15)
• National Fund for Control of Drug Abuse (applicable from FY 2015-16)

List of Donations Eligible for 50% Deduction without Qualifying Limit

• Prime Minister’s Drought Relief Fund
• Jawaharlal Nehru Memorial Fund*
• Indira Gandhi Memorial Trust*
• Rajiv Gandhi Foundation*

*Donations to these funds are not eligible for deduction from FY 2023-24 onwards.

List of Donations Eligible for 100% Deduction Subject to 10% of Adjusted Gross Total Income

• Donations to the government or any approved local authority, institution or association to be utilised to promote family planning
• Donation by a company to the Indian Olympic Association or any other notified association or institution established in India to develop infrastructure for sports and games in India or sponsor sports and games in India.

List of Donations Eligible for 50% Deduction Subject to 10% of Adjusted Gross Total Income

• Any other fund or institution satisfies the conditions mentioned in Section 80G(5).
• Government or any local authority, to be utilised for any charitable purpose other than promoting family planning.
• Any authority constituted in India to deal with and satisfy the need for housing accommodation or the purpose of planning, development or improvement of cities, towns, villages or both.
• Any corporation referred to in Section 10(26BB) for promoting the interest of the minority community.
• For repairs or renovation of any notified temple, mosque, gurudwara, church, or other places.

What is Adjusted Total Income?

Adjusted gross total income is the gross total income (sum of income under all heads) reduced by the aggregate of the following:

• Amount deductible under Sections 80C to 80U (but not Section 80G)
• Exempt income
• Long-term capital gains
• Short-term capital gains u/s 111A
• Income referred to in Sections 115A, 115AB, 115AC, 115AD and 115D

How does Deduction Under Section 80G Benefit Different Types of Taxpayers?

The tax benefit will depend on the tax rate applicable to the taxpayer. 

For example, Mr S is an individual and M/s. P Pvt. Ltd., a company, gives Rs 1,60,000 to an NGO. The total income for the AY 2024-25 of both Mr S and M/s. P Pvt. Ltd. is Rs 7,00,000. The tax benefit would be as shown in the table:

Note: The above computation is done on the basis of slab rates applicable to the old tax regime, since the assessee gets the benefit of deduction only if he opts to pay tax under the old tax regime.

Documents Required to Claim a Tax Deduction on Donations

Taxpayers who want to claim tax deduction under Section 80G must have the following documents to support their claim:

• Duly stamped receipt: Obtaining a receipt issued by the charity/trust to which you donate the amount is mandatory. The receipt should include details such as your name, address, amount donated,  PAN number of the trust, etc.
• Registration number of trust: All eligible trusts under this section are provided with a registration number by the Income Tax Department. Donors should ensure that the receipt contains the trust registration number.

Section 80GGA

Section 80GGA allows deductions for donations made towards scientific research or rural development. This deduction is allowed to all assessees except those who have an income (or loss) from a business and/or a profession.

Note: This deduction is not available if an individual taxpayer opts to pay taxes under the new tax regime (115BAC). 

Mode of Payment for Claiming Deduction Under Section 80GGA

Donations can be made through a cheque, a draft, or cash. However, cash donations over Rs 2,000 are not allowed as deductions. 100% of the amount donated or contributed is eligible for deductions. 

List of Donations Eligible Under Section 80GGA

• Any sum paid to a research association that undertakes scientific research, or a sum paid to a college, university, or any other institution to be used for scientific research that is approved by the prescribed authority under Section 35(1)(ii)
• The sum paid to a research association which undertakes research in social science or statistical research, or sum paid to a college, university, or any other institution to be used for the same purpose,  and these must all be approved by the prescribed authority under Section 35(1)(iii)
• The sum paid to an approved association or institution which undertakes any programme of rural development and is approved under Section 35CCA
• The sum paid to an approved association or institution which undertakes training of person(s) for implementing programmes of rural development
• The sum paid to a public sector company, local authority or an approved association or institution which carries out projects or schemes approved under Section 35AC.
• The sum paid to notified Rural Development Fund
• The sum paid to notified Fund for Afforestation
• The sum paid to notified National Poverty Eradication Fund

If a deduction has been allowed under Section 80GGA, such expenses shall not be deductible under any other provision of the Income Tax Act.

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