Many of us have at some point considered giving to charity and making our contribution to society. Donating to a cause you truly believe in and making a difference is commendable. Given the nobility of this gesture, the government gives its full support to charitable services. Section 80G of the Indian Income Tax Act allows you a tax deduction for donations to charitable organizations.
Budget 2023 updated
Donations to the following funds are not eligible for 80G deductions:
» Jawaharlal Nehru Memorial Fund
» Indira Gandhi Memorial Trust
What is Section 80G?
For donations to certain aid funds and charitable institutions, you can claim a deduction according to Section 80G of the Income Tax Act. However, all donations are not section 80G deductible.
Only donations to prescribed funds are deductible.This deduction can be claimed by any taxpayer - individual, company, firm or any other person.
Note: This deduction is not available if you opt for the new tax system.
What is the payment way?
This deduction can only be claimed if the contribution is paid by cheque, draft or cash. Benefits in kind such as food, supplies, clothing, medicines, etc. are not eligible for Section 80G deductions.
Change of § 80G:From FY 2017-18, cash donations over Rs 2,000 will no longer be deducted. The donations over Rs 2,000 should be made by means other than cash to qualify under Section 80G. Previously the limit for cash donations was Rs 10,000.
Eligible donation amount:The various donations referred to in Section 80G may be deductible up to 100% or 50%, with or without limitation, in accordance with Section 80G.
How to request the deduction
In order to claim this deduction, the following information must be submitted in yourIncome Tax Refund:
- name of the gift recipient
- PAN of the gift recipient
- address of the recipient
- Amount of the contribution – the distribution of the contribution in cash and in other forms
- The deductible amount
The above details must be mentioned in the relevant tables in the ITR.
- Table A:For 100% deductible donations with no credit limit
- Table B:For 50% deductible donations with no qualifying limit
- Table C:For 100% deductible donations subject to the credit limit
- Table D:For 50% deductible donations with claim limit
List of donations that are 100% deductible with no qualifying limit
- National Defense Fund established by the central government
- Prime Minister's National Relief Fund
- National Foundation for Communal Harmony
- A recognized university/educational institution of national importance
- Zila Saksharta Samiti is constituted in each district under the presidency of the collector of that district
- Fund set up by a state government to provide medical care to the poor
- National Health Fund
- National Blood Transfusion Council or to a 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
- Technology Development and Application Fund
- National Children's Fund
- Chief Minister's Relief Fund or Lieutenant Governor's Relief Fund in respect of a State or Union Territory
- Army Central Welfare Fund or Indian Naval Benevolent Fund or Air Force Central Welfare Fund, Chief Minister of Andhra Pradesh Cyclone Relief Fund, 1996
- The Relief Fund of the Chief Minister of Maharashtra during October 1, 1993 and October 6, 1993
- Earthquake Relief Fund des Chief Minister, Maharashtra
- Any fund set up by the Gujarat State Government solely to support the victims of the Gujarat earthquake
- Any trust, institution or fund to which Section 80G(5C) applies to provide assistance to victims of the Gujarat earthquake (contributed on January 26, 2001 and September 30, 2001)
- Armenian Prime Minister Earthquake Relief Fund
- Africa (Public Contributions - India) Fund
- Swachh Bharat Kosh (appendage to GJ 2014-15)
- Clean Ganga Fund (applicable from FY2014-15)
- National Drug Abuse Control Fund (applicable from FY2015-16)
List of donations that are 50% deductible with no qualifying limit
- Prime Minister's Drought Relief Fund
- Jawaharlal Nehru Memorial Fund
- Indira Gandhi Memorial Trust
- Rajiv Gandhi Foundation
Note: Donations to the last three funds are no longer deductible as of fiscal year 2023-24.
List of donations that are 100% deductible, subject to 10% of total adjusted gross income
- Donations to the government or an approved local authority, institution or association promoting family planning
- Donation by a company to the Indian Olympic Association or other notified association or institution incorporated in India to develop infrastructure for sports and games in India or to sponsor sports and games in India.
How does the Section 80G deduction benefit different types of taxpayers?
The tax advantage depends 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 A.Y. 2020-21 from Mr. S and M/s. P Pvt. ltd is Rs 7,00,000. The tax benefit would be as shown in the table:
MS. P Pvt. GmbH.
|i) Revenue for the 2020-21 financial year||7.00.000||7.00.000|
|ii) Spend an NGO||1.60.000||1.60.000|
|iii) Deductible amount (50% of donation made)||80.000||80.000|
|iv) Deductible amount u/s 80G (allowable gross amount with a maximum of 10% of total gross income)||50.000||50.000|
|v) Taxable income after deduction||6,20,000||6,20,000|
|A. Tax payable after considering a donation|
-Mr. S tax calculated according to income tax rate
-MS. P Pvt Ltd Tax calculated at 30%
|B. Tax Payable Before Donation||52.500||2.10.000|
|C. Tax Benefit of Section 80G Deduction||16.000||24.000|
List of donations that are 50% deductible, subject to 10% of total adjusted gross income
- Any other fund or entity satisfies the conditions set out in Section 80G(5).
- Government or local authority used for charitable purposes other than promoting family planning.
- Any authority established in India which regulates and satisfies the need for housing or the purpose of planning, developing or improving any town, town, village or both.
- Any body referred to in Section 10(26BB) for promoting the interests of the minority community.
- For repairs or renovations of any declared temple, mosque, gurudwara, church or other place.
§ 80 GGA
Section 80GGA allows deductions for donations made to scientific research or rural development.
This deduction is allowed for all assessees except those who have an income (or loss) from a business and/or profession.
The type of payment:
Donations can be made in the form of a check, draft or cash. However, cash donations over Rs 2,000 are not deductible. 100% of the amount donated or contributed is deductible.
List of eligible donations under Section 80GGA
- Any sum paid to a research association conducting scientific research, or any sum paid to a college, university or other entity intended to be used for scientific research, all of which are authorized by the prescribed authority under Section 35 (1) (ii) has been approved.
- Amounts paid to a research association conducting social science or statistical research, or amounts paid to a college, university or other entity to be used for the same purpose, and all of these must be approved by the prescribed authority in accordance with Section 35 (1)(iii)
- Amount paid to an accredited association or institution implementing a rural development program and accredited under Section 35CCA
- Amount paid to an accredited association or institution that provides training for people to implement rural development programmes
- Amount paid to a public sector corporation, local authority, or accredited association or institution implementing projects or plans approved under Section 35AC.
- Amount paid to notified rural development fund
- Amount paid to the notified afforestation fund
- Amount paid to the notified National Fund for the Eradication of Poverty
Insofar as a deduction is permitted under Section 80GGA, such expenses are not deductible under any other provision of the Income Tax Act.
How do you calculate 80GG? How do I claim 80GG?
80 GG deduction is allowed as the lowest of the below:
- Rs 5,000 per month
- 25% ofadjusted total income
- Actual rent minus 10% of adjusted total income
Total Adjusted Income
Adjusted Total Income:Adjusted Gross Total Income is total gross income (sum of income from all positions) minus the sum of the following:
- Deductible Amount Under Sections 80C through 80U (but not Section 80G)
- Free Income
- Long term capital gains
- Short term capital gains u/s 111A
- Income under Sections 115A, 115AB, 115AC, 115AD and 115D
frequently asked Questions
I have made donations to a trust of Rs 5,000 in cash and the donations to the trust qualify for a section 80G deduction. Can I claim a deduction at the time of filing a declaration?
No, 80G donations over Rs 2,000 are not deductible, so you cannot claim a deduction for them.
Can a partnership claim a Section 80G deduction?
Yes, an individual, firm, corporation or other person can claim a Section 80G deduction.
I am a non-resident and have made a donation to the Prime Minister's Relief Fund. Can I claim a Section 80G deduction?
Yes, both residents and non-residents are entitled to the benefit of the Section 80G deduction claim.
What is 80GG in Income Tax? What is rent paid under 80GG?
80GG, you can claim a deduction for rent paid even if your salary does not include the HRA component, or by self-employed people who have an income other than salary. The prerequisite for the deduction according to 80GG is that you do not have your own living space at your place of residence.
Who can claim a deduction in 80GG?
The deduction according to § 80GG is possible for employees who do not receive an HRA as part of their salary. HRA is not obtained by workers, who typically work in the informal sector, nor by the self-employed. The person claiming this deduction should not own a house in which they reside.
Can I claim both 80GG and HRA?
No, people who pay rent but do not receive housing benefit can claim the deduction according to § 80GG. Also, the individual, spouse, or children should not own a home at the place of work to qualify for this deduction.
Can I claim this deduction if I opt for the new tax regime?
No, Section 80G deductions are not permitted for individuals who elect a new tax regime.
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Under section 80G comes another sub-section, 80GGA which exempts the money donated towards any of the following causes: Any sum paid to a college, university or organization that is registered with the Income Tax Department and is involved in scientific research.What is Section 80G of the Income Tax Act? ›
Section 80G of the Income Tax Act primarily deals with donations made towards charity, with an aim to provide tax incentives to individuals indulging in philanthropic activities. This section offers tax deductions on donations made to certain funds or charities.What are the donations eligible under section 80G and 80GGA? ›
Individuals must make donations in only cash or cheque to be eligible for this tax deduction. Donations under Section 80GGA can be made via cash, draft or cheque. But, donations in cash over a sum of ₹ 2000 aren't allowed in the form of deductions.How do I know if I have 80G exemption? ›
Section 80G deduction of the Income Tax Act is allowed for amount paid by the taxpayer as donation to any fund or institution or charitable Trust. All donations are not treated equally under Income Tax Act. Donations to certain funds and institutions qualify for 100% or 50% deduction without any qualifying limit.How do I claim 80G tax exemption? ›
This deduction can only be claimed when the contribution is made via cheque, demand draft, or cash. In-kind contributions such as food, material, clothes, medicines etc., do not qualify for deduction under Section 80G.How do I claim 80G exemption? ›
Donations under 80G should be made to local authority or government which is used for any charitable purposes. Only 10% of the Adjusted Gross Income becomes eligible for deductions. However, an amount exceeding this limit will be capped at 10%.How do I apply for 80G exemption? ›
- Registration Certificate.
- MOA /Trust Deed.
- NOC from the proprietor of the land where the registered office is situated.
- Copy of the Pan Card of the Trust/Institution.
- Copy of electricity bill, house tax receipt, or water bill.
- Proof of welfare activities pursued.
Deductions under Section 80G
Donations with an upper limit: 50% or 100% of the total contribution can be deducted, as per the charitable institution where the amount is donated. You must note that the deducted amount in this type is limited to only 10% of your gross total income.
- Any other fund or any institution which satisfies the conditions mentioned in Sec 80G(5)
- Government or any local authority, to be utilized for any charitable purpose other than the purpose of promoting family planning.
Provisions under Section 80GGA
Individuals whose Gross Total Income does not include income which can be charged under profits and gains of a business are eligible for deductions. In essence, taxpayers who do not have an income source from business or profession are entitled for such deductions.
- For the prior year, you had a right to a refund of all federal income tax withheld because you had no tax liability.
- For the current year, you expect a refund of all federal income tax withheld because you expect to have no liability.
Generally, if you have donated to charitable trusts or section 8 companies or organisations, you are entitled to an 80G certificate, which exempts you from paying taxes in part or full.How do I get tax exemption for donations? ›
The benefit is availed by reducing 50% of the donated amount from your taxable salary. For instance, if your taxable income per year is Rs 200,000 and you make a donation of Rs 5,000 then your net taxable income will become Rs 197,500 ( i.e., Rs. 200,000 – 50% of your donation i.e., Rs.What is 80G rent paid? ›
Section 80GG is a special provision under Chapter VI-A of the Income Tax Act, 1961, which provides tax reprieve to those who do not avail house rent allowance. To become eligible for tax deduction under this section, an individual must be residing in a rented property.What is qualifying amount U S 80G? ›
Calculation of Deduction under section 80G of Income Tax Act. How to claim deduction under section 80G? Donations Eligible for 100% Deduction u/s 80G Without Qualifying Limit. Donations Eligible for 50% Deduction Without Qualifying Limit. Donations Eligible for 100% Deduction Subject to 10% of Adjusted Gross Total ...What does 80G mean? ›
Section 80G is a facility available in the Income Tax Act which allows taxpayers to claim deductions for various contributions made as donations. The deduction under the Act is available for contributions made to the specified relief funds and charitable institutions.How much amount is eligible for 80G? ›
Payment Mode for donations under Section 80G
An amount up to Rs 2000 can be donated in the form of cash. Taxpayers must note that donations processed under foreign trusts and political parties will not be covered under section 80 of the Income Tax Act.
Under Section 80GG of the Indian Income Tax Act 1961, any individual (no Companies) can claim a deduction on the rent they pay for their accommodation. To claim the deduction, the person must be self-employed or salaried.How do you calculate 80GG with example? ›
The deduction under Section 80GG is given to the least of the following:
- Total rent paid minus 10% of basic salary.
- Rs 60,000 per year (Rs 5,000 per month).
- 25% of the adjusted gross total income.
Section 80GG of the Income Tax Act provides deductions related to house rent based on certain conditions. Some of these entail being an individual or a Hindu Undivided Family (HUF), being self-employed or salaried, etc. One of the most important tax deductions available to us is that on house rent.
|No.||Charity Name||Percentage of Tax Deduction that is Allowed|
|1||Armed Forces Welfare Fund||100%|
|2||National Illness Assistance Fund||100%|
|3||National Blood Transfusion Council||100%|
|4||Relief Fund by the Chief Minister of any State (Union Territory)||100%|