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Section 80G: Deduction for Donations

Economy, GST, People

Lets Discussed 80G of Income-tax Act with CA Mohit Gupta.

Section 80G: Deduction for Donations

Government introduces this section to help a needy person, it means if you are giving the donation in form of money then you are eligible for deduction under section 80G.

  1. What is Section 80G Of Income Tax Act?

Contributions made by the assessee to certain relief funds and charitable institutions can be claimed as a deduction under Section 80G of the Income Tax Act. All donations, however, are not eligible for deductions under section 80G. Only donations made to prescribed funds by the income tax act qualify as a deduction of 80G.

  1. Who is Eligible to Deduction Of 80G Of Income Tax Act?

This deduction can be claimed by any taxpayer –Such as individuals, company, firm or any other person.

  1. Which Type of Donation is allowed For Claiming 80 G Deduction?

The donation allowed u/s 80G in the Form of Money not Form of Any Kind other than Money.

  1. What is Mode of Payment Of Money For Claiming 80G Deduction?

Mode of payment to claim 80G Deduction donations made in cash Amount exceeding Rs 2,000 will not be allowed as deduction.it means Cash Donation only up to Rs.2000 The donations above Rs 2,000 should be made in any mode other than cash i.e. Cheque any Banking mode to qualify as a deduction under section 80G.

  1. Maximum allowable deduction under section 80G 

If the aggregate of the sums donated exceeds 10% of the adjusted gross total income, the amount in excess of 10% ceases to be entitled to the tax benefit.i.e.only upto10% of the adjusted gross total income.

  1. How to Claim Benefit of Sec 80G By The Taxpayer in his Income Tax Return?

Name of the Donee, PAN OF Donee, Address of the Donee, Amount of Contribution Details Show while filing ITR.

7.  Donations with 100% deduction under section 80G without any qualifying limit:-

1. National Defence Fund set up by the Central Government

2. Prime Minister’s National Relief Fund

3. National Foundation for Communal Harmony

4. An approved university/educational institution of National eminence

5. Zila Saksharta Samiti constituted in any district under the chairmanship of the Collector of that district

6. Fund set up by a State Government for the medical relief to the poor

7. National Illness Assistance Fund

8. National Blood Transfusion Council or to any State Blood Transfusion Council

9. National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation, and Multiple Disabilities

10. National Sports Fund

11. National Cultural Fund

12. Fund for Technology Development and Application

13.National Children’s Fund

14. Chief Minister’s Relief Fund or Lieutenant Governor’s Relief Fund with respect to any State or Union Territory

15. The Army Central Welfare Fund or the Indian Naval Benevolent Fund or the Air Force Central Welfare Fund, Andhra Pradesh Chief Minister’s Cyclone Relief Fund, 1996

16.The Maharashtra Chief Minister’s Relief Fund during October 1, 1993, and October 6, 1993

17. Chief Minister’s Earthquake Relief Fund, Maharashtra

18. Any fund set up by the State Government of Gujarat exclusively for providing relief to the victims of the earthquake in Gujarat

19. Any trust, institution or fund to which Section 80G(5C) applies for providing relief to the victims of the earthquake in Gujarat (contribution made during January 26, 2001, and September 30, 2001) or

20. Prime Minister’s Armenia Earthquake Relief Fund

21. Africa (Public Contributions – India) Fund

22. Swachh Bharat Kosh (applicable from FY 2014-15)

23. Clean Ganga Fund (applicable from FY 2014-15)

24. National Fund for Control of Drug Abuse (applicable from FY 2015-16)

8. Donations with a 50% deduction under section 80G without any qualifying limit.

1.Jawaharlal Nehru Memorial Fund

2.Prime Minister’s Drought Relief Fund

3.Indira Gandhi Memorial Trust

4.Rajiv Gandhi Foundation

9. Donations to the following are eligible for 100% deduction subject to 10% of adjusted gross total income

  1. 1.Donations to the Government or a local authority for the purpose of promoting family planning.
  2. Sums paid by a company to the Indian Olympic Association.
  3. Swachh Bharat Kosh ( From A.y 2015-16)
  4. Clean Ganga Fund ( From A.y 2015-16)
  5. National Fund For control of drug abuse (From A.y 2016-17

10. Donations to the following are eligible for 50% deduction under section 80G subject to 10% of adjusted gross total income

  1. Donation to the Government or any local authority to be utilized by them for any charitable purposes other than the purpose of promoting family planning.
  2. Any Authority referred to in section 10(20A) for the purpose of dealing with and satisfying the need for housing accommodation or for the purpose of planning/development of town and village.
  3. Any Corporation specified in section 10(26BB) for promoting the interest of minority community
  4. Any notified temple, mosque, gurudwara church or another place (for renovation or repair)
  5. trusts/institution registered u/s 12A & 80G of Income Tax in India that claims to be engaged in charitable activities.

11Calculation of Adjusted Gross Total Income:-

The qualifying limits u/s 80G is 10% of the adjusted gross total income. The limit is to be applied to the adjusted gross total income. The ‘adjusted gross total income’ for this purpose is the gross total income (i.e. the subtotal of income under various heads) reduced by the following:-

  • Amount deductible under Sections 80C to 80U (but not Section 80G)
  • Exempt income
  • Long-term capital gains
  • Short- term capital gains taxable @15 percent under section 111A.
  • Income referred to in Sections 115A, 115AB, 115AC, 115AD relating to non-residents and foreign companies.
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