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Section 80G: Deductions for Donations

Section 80G deals with donations made towards charity, to provide tax incentives to individuals indulging in charitable activities. To encourage people to donate, the government also allows for income tax deductions under Section 80G for the amount which has been donated.

Eligibility under Section 80G:

  • Deduction under section 80G can be claimed by all the types of taxpayers like individual, HUF, AOP, company, firm etc.
  • Such taxpayers may be resident or non-resident.
  • Donations made to valid and registered trusts only qualify for deductions under this section.
  • Donations made to foreign trusts and political parties are not covered under the ambit of this section.
  • Donation made in kind for instance food, clothes, medicine etc, are not eligible for deductions.
  • Donations is eligible which are paid either by cash or cheque or Draft.

Deduction under Section 80G:

Under section 80G, the donations / contribution is divided into the following four groups:-

i) Donations qualified for 100% deduction without qualifying limit:

In some cases, full deduction is allowed for the total amount donated i.e. 100% deduction without any limit. Some of the donations eligible for 100% deduction u/s 80G include: National Defence Fund set by the Central Govt., Prime Minister’s National Relief Fund, Prime Minister’s Armenia Earthquake Relief Fund, University/ Education Institution of National eminence approved by the prescribed authority, Swachh Bharat Kosh, Clean Ganga Fund , etc.

ii)  Donations qualified for 100% deduction subject to 10% of the adjusted gross total income:

The following deductions are allowed subject to a maximum of 10% of the adjusted gross total income. Donations made to local authorities or government to promote family planning and donations to Indian Olympic Association qualify for deductions under this category.

iii) Donations qualified for 50% deduction without qualifying limit:

Donations made towards these trusts qualify for 50% deduction. Donations made towards trusts like Prime Minister’s Drought Relief Fund, National Children’s Fund, Indira Gandhi Memorial Fund, etc. qualify for 50% tax deduction on donated amount.

iv) Donations qualified for 50% deduction subject to 10% of the adjusted gross total income:

The following donations are allowed with 50% deduction subject to qualifying amount. Donations made to any local authority or the government which would then use it for any charitable purpose qualify for deductions under this category. In such cases, only 10% of the donor’s Adjusted Gross Total Income are eligible for deductions.

Donations made towards any corporation referred to in Section 10(26BB) for promoting the interest of the minority community, for repairs or renovation of any notified temple, mosque, gurudwara, church or other places, etc. qualify for deductions under this category.

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Note: This Post was last updated on January 23, 2023

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