Section 80G of the Income Tax Act allows taxpayers to claim a deduction on donations made to specified funds and charitable institutions — encouraging philanthropy while providing tax relief. The deduction ranges from 50% to 100% of the donation amount, subject to certain conditions. Here is the complete guide.
Four Categories Under Section 80G
Category A — 100% Deduction Without Limit:
- PM National Relief Fund
- PM CARES Fund
- National Defence Fund
- National Children's Fund
- Chief Minister's Relief Fund or Lieutenant Governor's Relief Fund
Category B — 50% Deduction Without Limit:
- Jawaharlal Nehru Memorial Fund
- Indira Gandhi Memorial Trust
- Rajiv Gandhi Foundation
Category C — 100% Deduction With Qualifying Limit: Donations to approved funds and institutions — 100% deductible but subject to 10% of Adjusted Gross Total Income ceiling.
Category D — 50% Deduction With Qualifying Limit: Donations to approved charitable trusts — 50% deductible subject to 10% of Adjusted Gross Total Income ceiling.
The "Qualifying Limit" Explained
For categories C and D, the maximum deduction cannot exceed 10% of the "Adjusted Gross Total Income" — which is Gross Total Income minus long-term capital gains, short-term capital gains under Section 111A, and deductions under all other sections. Donations beyond this cap do not get any deduction.
Cash Donation Restriction
Donations in excess of ₹2,000 must be made through non-cash modes (cheque, bank transfer, UPI) to qualify for 80G deduction. Cash donations above ₹2,000 are not eligible for the deduction even if the institution is approved under 80G.
Form 10BE — Donation Certificate
From FY 2021-22, charitable institutions issue Form 10BE as the donation receipt/certificate after filing their own return with donation details. Form 10BE is available on the donor's AIS and can be pre-filled in the ITR. Without a valid Form 10BE from an approved institution, the 80G deduction may be disallowed on scrutiny.
Conclusion
Section 80G makes charity tax-efficient — but only for donations to approved, registered institutions with valid Form 10BE. SPOTON ensures all eligible 80G deductions are correctly claimed in client ITRs. Contact us for comprehensive income tax planning and return filing services.
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