Section 80G of the Income Tax Act, 1961 allows the inclusion of donations to charitable institutions and relief funds as a deduction from gross total income before calculating the actual income tax. Deduction under this section is not confined to a specific category of person/assessee. The deduction can be availed by a person who has provided a donation to a charitable institution or Government relief fund. However, one must always remember that any donation made to trusts situated outside the country and political parties do not qualify for the tax deduction under this section. The donation provided to the political parties by an individual can be claimed as a deduction under Section 80GGC of the Income Tax Act.
A resident or a Non-Resident Indian (NRI) of the country can claim deductions under Section 80G. Anybody can claim the deduction under this section whether you are an individual, company, or partnership firm.
Amount of donation which can be claimed as a deduction
The amount of donation which can be asserted as a deduction under Section 80G is determined according to specific standards. Either 100% or 50% can be claimed as a deduction “With Upper Limit” or “Without Upper Limit”. The I-T department has told (and occasionally refreshes) a rundown of foundations/entities specifying the limit of deduction which can be claimed as a donation made to each organization.
Deduction on donation “Without Upper Limit”
When the “Without Upper Limit” clause is applicable to the donation made to an organization, then at that point the donor can easily claim either 50% or 100% of the amount donated. Given below is a table that shows a list of organizations where the amount donated can be claimed for deduction without any upper limit.
|Name of the Entity||Deduction (as a percentage of amount donated)|
|National Defence Fund set by the|
|Prime Minister’s National Relief Fund||100%|
|Prime Minister’s Armenia Earthquake Relief Fund||100%|
|National Children’s Fund||100%|
|National Foundation for Communal Harmony||100%|
|Approved University or Educational Institution of National Eminence||100%|
|Chief Minister’s Earthquake Relief Fund, Maharashtra||100%|
|Fund set up by State Government of Gujarat for providing relief to the victims of earthquake in Gujarat||100%|
|Zila Saksharta Samiti||100%|
|National Blood Transfusion Council or a State Blood Transfusion Council||100%|
|Fund set up by a State Government for the medical relief to the poor||100%|
|Central Welfare Fund of Army or the Indian Naval Benevolent Fund or The Air Force Central Welfare Fund||100%|
|Andhra Pradesh Chief Minister’s Cyclone Relief Fund||100%|
|National Illness Assistance Fund||100%|
|Chief Minister’s Relief Fund or Lieutenant Governor’s Relief Fund||100%|
|National Sports Fund or National Cultural Fund or Fund for Technology Development and Application||100%|
|Swachh Bharat Kosh||100%|
|Clean Ganga Fund||100%|
|National Fund for Control of Drug Abuse||100%|
|Jawaharlal Nehru Memorial Fund||50%|
|Prime Minister’s Drought Relief Fund||50%|
|Indira Gandhi Memorial Fund||50%|
|Rajiv Gandhi Foundation||50%|
Deduction on donation “With Upper Limit”
The organizations where the ‘With Upper Limit’ provision is relevant then the deduction can be claimed as either 100% or 50% (whichever is allowed for that particular entity) of 10% of the Gross balanced Income of that individual.
|Particulars||Deduction (as a percentage of net qualifying amount)|
|Donation to Government or any approved local authority, an institution in order to create awareness regarding family planning.||100%|
|Donation made by a company to the Indian Olympic Association or any other association ready for the development of infrastructure of sports and games in India||100%|
|Donation made to institutions which satisfy conditions mentioned under Section 80G(5)||50%|
|Donation to Government or any local authority for any charitable purpose other than family planning.||50%|
|Donation to the authorities concerned with the planning of town, villages||50%|
|Corporation promoting the interest of minority community specified in section 10 (26BB)||50%|
|Donation to different places of worship such as Temple, Gurdwara, Mosque, Church||50%|
How to make donations to claim tax deduction?
Cash/Cheque/Demand Draft can be used as modes of payment when making a donation. This means that donations made in the form of food, clothes, or any other items will not be eligible for the tax deduction under this section. From 2017-18, the donations made in cash that are more than Rs 2,000 do not qualify for a tax deduction, earlier this the cash limit was Rs 10,000.
How to claim a tax deduction?
To claim a tax deduction, you need to fill and submit the following details while filing your Income Tax Return:
- Name of the entity/scheme/fund
- PAN of the entity/scheme/fund
- Address of the entity/scheme/fund
- Amount to be donated
Documents required to claim tax deduction
In order to claim a deduction in tax, you need to submit the following documents:
- Standard Receipt of the done entity as proof that donation has been made.
- The receipt must include Name, Address, PAN Number of the trust/done entity, Registration number of the entity, Name of the donor, amount donated should be written in words, and as well as figures.