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Tax deductions on Donations

Tax deduction on Donations. Section 80 G Eligibility, donations permitted

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.