Tax deductions on Donations

Section 80 G of the Income Tax Act allows tax deductions on donations, that are made to any charitable trust. One of the best ways to save money while doing their bit for contributing to the world is making that allows deductions under Section 80 G. Towards this generous gesture, the government extends supports through the deduction on tax. Section 80 G of the Income Tax Act primarily deals with the donation that is made towards charity for providing tax incentives to the individuals who indulge in philanthropic activities. This section offers deductions on the donation that are made to certain relief funds and charitable trusts. An amount that is donated by an individual to an eligible charity can be claimed as a tax deduction while filing the ITR. But it is to be noted that all donations are however not eligible for deductions under Section 80 G. Only donations that are made to prescribed funds qualify for deductions which can be claimed by any taxpayer like individuals, companies, firms, or any other person.

Eligibility for tax deduction under Section 80 G

All taxpayers that including individuals, companies, Hindu Undivided Families are eligible to make donations to charity under Section 80 G and claim a tax deduction but are subject to the certain limitation set by the government. NRIs are also entitled to the benefits under Section 80G provided the donations are made to eligible trusts or institutions.

Permitted Donations for tax deduction under Section 80 G

Individuals willing to claim tax deduction under Section 80 G need to ensure that the donation they are donating falls under the purview of this Act. Only the donations made to registered and valid funds or charitable institutions qualify for suitable deductions. Trusts and Charities are required to be registered under Section 12 A after they qualify for 80 G CERTIFICATE.

100 % Deduction without any qualifying limit

National Defence Fund that is set 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 of any district under the chairmanship of the Collector of that district.
Funds that are set up by the State Government for medical relief to the poor.
National illness assistance fund
National blood transfusion council or to any state blood transfusion council
National trust or welfare of the 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 concerning any state or union territory.
The army central welfare fund or the Indian Naval Benevolent or the Air Force Central Fund, Andhra Pradesh chief minister’s cyclone relief fund,1996.
CM’s earthquake relief fund Maharashtra
Any fund that is 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 80 G (5C) is applicable for providing relief to the victims of the earthquake in Gujarat
Prime Minister’s Armenia Earthquake Relief Fund
Africa (Public Contributions- India) Fund.
Swacch Bharat Kosh ( Applicable from FY 2014- 2015)
Clean Ganga Fund ( applicable from FY 2014- 2015)
National Fund for Control of Drug Abuse ( applicable from Fy 2015 - 2016)

Donations Eligible for 50% deduction without qualifying

Jawaharlal Nehru Memorial Fund
Prime Minister's Drought Relief Fund
Indira Gandhi Memorial Trust
Rajiv Gandhi Foundation.

Donation Eligible for 100% deduction subject to 10% of the Adjusted Gross total income.

Donations to the government or any approved local authority, institutions, or association to be utilized for the purpose that promoting family planning. Donation by a company to the Indian Olympic Association or to any other notified association or the institutions that are established in India for the development of infrastructure for sports and games in India or the sponsorship of the sports and games in India.

Donations with 50% deduction (Subjected to 10% of adjusted gross total income)

Donations that are made to any local authority or government would then use it for any charitable purpose for deductions under the category. In such cases only 10% of the donor's adjusted gross total income is eligible for deductions, donations that are exceeding this amount are cap[ped at 10%.

Document required for claiming deduction under Section 80 G.

Individuals willing to claim tax deduction under Section 80 G are required to submit the following documents to support the claim:

Duly Stamped Receipt: It is mandatory to have a receipt that is issued by the trust/ charity which receives a donation. This receipt has to include details like the name, address, and PAN number of the trust, amount donated and the donor's name. Form 58: It is needed if the donor is intending to claim a 100% tax deduction on donation without which the donation is not available for 100% deduction. Registration Number of the trust: Each eligible trust is provided with a registration number by the Income Tax Department and donors should ensure their receipt contact this number. This registration number should be valid on the date of a particular donation.

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Frequently Asked Questions

Common questions about Tax Deduction on Donations: Section 80G India.

Section 80G of the Income Tax Act deals with the tax deductions available on donations made to eligible charitable trusts and funds. It provides tax incentives to individuals and organizations that engage in philanthropic activities.

All taxpayers, including individuals, companies, Hindu Undivided Families (HUFs), and Non-Resident Indians (NRIs), are eligible to claim tax deductions on donations made to eligible trusts or institutions under Section 80G.

Donations made to certain funds and charitable institutions approved by the government are eligible for tax deductions under Section 80G. These include the National Defence Fund, Prime Minister's National Relief Fund, approved educational institutions, and state relief funds, among others mentioned in the article.

Yes, the deduction rates vary depending on the type of donation and the recipient organization. For instance, some donations qualify for a 100% deduction without any qualifying limit, while others are eligible for a 50% deduction or a 100% deduction subject to 10% of the adjusted gross total income.

To claim tax deductions under Section 80G, donors must provide a duly stamped receipt from the trust/charity, which includes details such as the trust's name, address, PAN number, and the amount donated. Additionally, Form 58 is required for claiming a 100% tax deduction, and the trust's registration number must be valid on the date of donation.

No, not all donations made to charities are eligible for tax deductions under Section 80G. Only donations made to registered and valid funds or charitable institutions prescribed under the Income Tax Act qualify for deductions.

In some cases, there is a limit on the amount that can be claimed as a deduction under Section 80G. For instance, donations eligible for a 100% deduction subject to 10% of the adjusted gross total income are capped at 10% of the donor's adjusted gross total income.

Yes, Non-Resident Indians (NRIs) are also entitled to the benefits under Section 80G, provided the donations are made to eligible trusts or institutions.

Yes, trusts and charities are required to be registered under Section 12A and qualify for an 80G certificate for donations made to them to be eligible for tax deductions under Section 80G.

The article does not specifically mention donations made to religious organizations as eligible for deductions under Section 80G. However, if a religious organization is registered as a charitable trust and approved under Section 80G, donations made to it may potentially qualify for deductions.