Section 80G: Income Tax Deductions For Charity

Section 80G

The Indian government has been advocating for individuals to make donations towards the poor and needy people on a regular schedule. To foster the notion of charity, this contribution may also be taken as a deductible under Section 80G. Various government groups and non-governmental organisations are working for charity improvement. If you donate gifts to these organisations, which will guarantee that the funding is used appropriately. For detailed information, let’s walk through the article.

What is Section 80G?

Section 80G of the Income Tax Act permits an exemption for contributions designated towards funds for relief and charitable organisations. This deduction is available to all taxpayers, NRIs, HUFs, corporations, partnerships, etc. However, not all contributions qualify for the 80G Deduction.

Section 80G Eligibility

If you want to collect tax deductions via Section 80G, you must fulfill the following criteria:

  • An individual or a HUF
  • Non-residents of India who make contributions to the relevant trusts
  • Provide contributions evidence 
  • You should have made the charitable contribution from your taxable income
  • Donations made with non-taxable income are not tax-deductible

Donations Permitted Under Section 80G

Individuals who intend to claim deductions under Section 80G must verify that the organisation to which they are contributing is covered by this Act. In addition, only gifts given to recognized and authorized funds or charitable organisations are eligible for appropriate deductions.

Foundations and organisations must be listed under Section 12A to be eligible for the 80G license. People are encouraged to investigate an organisation’s qualifications before contributing to it.

Exemptions Under Section 80G

Donations from individuals are not always eligible for Section 80G deductions. Contributions to foreign corporations and political associations aren’t included by this clause; therefore, taxpayers are not eligible for tax deductions for them.

Donation Deduction Under Section 80G

Donation deductions can be recovered under the following categories, as per Section 80G of the IT Act:

  • Donations Deduction with no upper limit: Depending on the charity organisation, 50% or 100% of every donation is deductible, with no further restrictions.
  • Donations Deduction with an upper limit: 50% or 100% of the entire donation can be eliminated, depending on the charitable organisation to which the funds are contributed. It is important to note that the sum withdrawn in this case is restricted to 10% of your gross total revenue.
Name of the Charity Allowed total % of Tax Deduction 
Military Welfare Fund100
National Illness Relief Fund100
National Blood Council of Transfusion100
Relief Fund by the Chief Minister of any State (Union Territory)100
Samiti Zila Saksharta100
Children’s National Fund100
Rajiv Gandhi Memorial Trust50
State Government’s Fund for Medical Support to the Poor100
PM’s Drought Relief Fund50
Jawaharlal Nehru Memorial Fund50
Indira Gandhi Memorial Trust50
Indian Olympic Association100
Approved University or National Educational Institutions such as IIT, NIT etc.100
Swachh Bharat Kosh100
National Trust for the Well-being of People Having Mental Retardation, cerebral palsy, several Disabilities and Autism100
National Cultural Fund100
Prime Minister’s National Relief Fund100
Clean Ganga Fund100
Development of Technology and Application Fund100
Chief Miniter’s Earthquake Relief Fund, Maharashtra100

Scope of Deduction Under Section 80G

For the contribution to be legitimate under Section 80G, several basic criteria are required to be fulfilled. A number of the key points are listed below.

  • Donations must only be made with taxable or exemption income. Charities made with non-taxable income are not eligible for a tax reduction.
  • Only cash or check presents are permitted, with gifts in clothing, groceries, medicines, and so on being ineligible under Section 80G.
  • When it concerns contributions to the Indian Olympic Organization, only corporations are eligible for tax breaks.
  • Deductions are only available for gifts made to authorised and established trusts.
  • Donations to foreign entities and political groups are not deductible.

Documents Requirements to Claim Deduction Under 80G

Individuals who desire to claim an exemption under Section 80G must have the following subsequent papers:

  • Form 58
  • Duly Stamped Receipt
  • Registration Number of Trust

Mode of Payments for Donation Under Section 80G

Taxpayers are eligible to make payments under Section 80G deductions. Thus, they make donations using payment methods like Cheques, Demand drafts and Cash (less than ₹ 2,000). 

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List of Eligible Donations Under Section 80G

The following list shows the eligibility for tax-deductible donations under Section 80G:

  • National Relief Fund established by the Prime Minister
  • National Illness Relief Fund
  • Concerning any Union Territory or State, the Chief Minister’s or Lieutenant Governor’s Relief Fund
  • National Sports Foundation
  • The National Trust for the Welfare of People with Autism, Mental Retardation, Cerebral Palsy, and Other Disabilities
  • National Communal Harmony Foundation
  • A university/educational institution of national renown that has been accredited
  • The Indian Naval Benevolent/ Air Force Central Welfare/ Army Central Welfare Fund, the Andhra Pradesh Chief Minister’s Cyclone Relief Fund in 1996
  • Africa (Indian Public Contributions) Foundation
  • Any trust, fund, or organisation to which Section 80G(5C) relates to offering relief to Gujarat earthquake victims (donations were made between January 16th, and 30 September 2001)
  • Chief Minister’s Earthquake Compensation Agency(Maharashtra)
  • Swachh Bharat Kosh (This was implemented in the fiscal year 2014-2015)
  • Technology Growth and Application Fund
  • Any fund established by the Gujarat State Government largely to provide relief to earthquake victims in Gujarat
  • Children’s National Fund

How to Claim the Deduction?

When filing an ITR to claim deductions, the following information must be given: 

  • Donee’s Full Name/ PAN Card Number/ Address 
  • Deducted total amount 
  • Contributed total amount

To Sum Up

Section 80G of the Income Tax Act of 1961 is a successful technique of claiming tax deductions, operating as a very valuable tax-saving tool. It is also useful in contributing to the expansion and growth of the community and claiming tax credits for your efforts.

Frequently Asked Questions (FAQs)

Can NRI claim tax benefits under Section 80G?

Yes, NRI claims tax benefits under Section 80G.

I am a partner in a partnership firm and want to claim deductions under Section 80G. Is the firm eligible for the same?

Yes, you can claim a deduction under Section 80G, if you work in a partnership firm.

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