A Comprehensive Guide on Section 80G

What is Section 80G?

Section 80G of the Income Tax Act is a provision that allows taxpayers to claim deductions on donations made to eligible charitable institutions and funds. The purpose of this section is to incentivise philanthropy and support organisations engaged in social, cultural, or economic development activities.

How to calculate deduction under 80G

The calculation of deductions under Section 80G depends on the nature of the donation. For donations eligible for a 100% deduction without any qualifying limit, the entire donated amount can be claimed as a deduction. In the case of donations with specific limits, the taxpayer can claim a deduction based on the prescribed percentage of the donated amount.

Donations Eligible Under Section 80G

Individuals, Hindu Undivided Families (HUFs), companies, and taxpayers of all categories are eligible to claim deductions under Section 80G. However, it is crucial to ensure that the charitable institution or fund to which the donation is made qualifies for deductions under this section.

Documents required to claim deduction under Section 80G

To claim a deduction under Section 80G of the Income Tax Act in India, individuals need the following documents:

1. Donation receipts: Official receipt from the charitable institution with donor details, donation amount, and Section 80G registration number.
2. PAN (Permanent Account Number): Donor's PAN details for identity verification.
3. Details of charitable institution: Name, address, and Section 80G registration details of the charitable organisation.
4. Proof of payment: Bank statements or transaction records showing the mode of payment.
5. Form 16A (if applicable): TDS certificate issued by the charitable organisation for tax-deductible donations.
6. Self-declaration form (for cash donations): Required for cash donations, specifying details.
7. Bank account details: Information about the bank account used for the donation.
8. Section 80G deduction details: Accurate information about the donation amount, date, and related details for claiming the deduction in the Income Tax Return.

Keep these documents for proper record-keeping and reference during income tax filings. Always adhere to the latest guidelines from the department of Income Tax for accurate documentation.

How to make the Section 80G deduction claim

Taxpayers can claim deductions under Section 80G while filing their Income Tax Returns. It is essential to accurately fill in the details of the donated amount and the particulars of the charitable organisation in the relevant sections of the tax return form.

Section 80G tax exemption

Section 80G of the Income Tax Act in India provides tax exemptions for donations made to specified charitable institutions and funds. The tax exemption under Section 80G is intended to encourage philanthropy by allowing individuals and entities to deduct the amount of donations made from their taxable income. Here are key points regarding Section 80G tax exemption in India:

1. Deduction on donations: Individuals and entities making eligible donations can claim a deduction from their taxable income under Section 80G. The deduction is allowed based on the amount donated to specified institutions and is subject to certain conditions.
2. 100% exemption or 50% exemption: The extent of the tax exemption depends on the nature of the donation and the recipient organisation. Some donations qualify for a 100% exemption, while others are eligible for a 50% exemption. The specific details are mentioned in the Income Tax Act.
3. Qualifying limits: Donations that qualify for a 100% exemption typically do not have a qualifying limit. However, for those eligible for a 50% exemption, there may be limits specified as a percentage of the donor's gross total income.
4. Eligible organisations: Not all charitable organisations qualify for exemptions under Section 80G. Only institutions and funds registered under this section and approved by the Income Tax Department are eligible to receive donations with associated tax benefits.
5. Verification of eligibility: It is important for donors to verify the eligibility of the organisation or fund before making a donation. The Income Tax Department issues a list of approved institutions eligible for 80G benefits.
6. Donation receipts and documents: To avail of the tax exemption, donors must obtain a receipt from the charitable organisation for the donation made. The receipt should include details such as the name and address of the donor, the amount donated, and the registration number of the recipient organisation under Section 80G.
7. Claiming exemption in Income Tax Return: Taxpayers can claim the exemption while filing their Income Tax Returns. The relevant details, including the amount donated and the details of the recipient organisation, must be accurately filled in the appropriate sections of the tax return form.

Section 80G donation limit

Section 80G of the Income Tax Act in India allows for deductions on donations made to eligible charitable institutions. The donation limit under Section 80G can vary based on the nature of the donation and the specific provisions of the section. Here are some key points regarding the donation limit under Section 80G:

1. 100% deduction without qualifying limit: Certain donations are eligible for a 100% deduction without any qualifying limit. These are typically donations made to specific funds or organisations that have been identified by the government for complete deduction.
2. 50% deduction with qualifying limit: For some donations, the deduction limit is set at 50% of the donated amount. This means that taxpayers can claim a deduction of up to 50% of their gross total income.
3. Specific limits for different donations: The donation limit can vary depending on the specific fund or organisation to which the contribution is made. Some organisations may have a higher limit, while others may fall under the 50% deduction category.
4. Agricultural research and rural development: Donations made for rural development or agricultural research are generally eligible for a 100% deduction without any qualifying limit.
5. Donations to certain religious institutions: Contributions made to certain religious institutions may be subject to specific limits, and the percentage of deduction can vary.

List of donations eligible for 100% deduction without qualifying limit

The list of donations eligible for 100% deduction without a qualifying limit under Section 80G in India includes contributions made to various funds and organisations. Please note that the list may be subject to changes, and it is advisable to check the latest notifications from the Income Tax Department for the most current information. Here are some examples of donations typically eligible for a 100% deduction without a qualifying limit:

1. Prime Minister's National Relief Fund (PMNRF): Donations to the PMNRF qualify for a 100% deduction without any specified limit.
2. National Defense Fund (NDF): Contributions to the National Defense Fund are eligible for a 100% deduction without any prescribed limit.
3. Prime Minister's Armenia Earthquake Relief Fund: Donations to the relief fund for the victims of the Armenia earthquake qualify for a 100% deduction without any specified limit.
4. Africa (Public Contributions – India) Fund: Contributions to the Africa (Public Contributions - India) Fund may be eligible for a 100% deduction without a qualifying limit.
5. National Foundation for Communal Harmony: Donations to the National Foundation for Communal Harmony are typically eligible for a 100% deduction without any specified limit.
6. An approved university or educational institution of national eminence: Donations made to certain educational institutions may be eligible for a 100% deduction without a qualifying limit.
7. Swachh Bharat Kosh (SBK): Contributions to the Swachh Bharat Kosh may be eligible for a 100% deduction without any specified limit.
8. Clean Ganga Fund: Donations to the Clean Ganga Fund may qualify for a 100% deduction without a prescribed limit.

It is essential to verify the latest list of eligible institutions and funds directly from the official website of the Income Tax Department of India or through official notifications.You can also use an income tax calculator to estimate your deductions. Tax regulations can change, and the government periodically updates the list of eligible entities for Section 80G deductions. Always refer to the most recent guidelines for accurate and current information.

Related income tax sections

Benefit for different types of taxpayers under Section 80G?

Section 80G of the Income Tax Act provides tax deductions for donations made to specified funds and charitable institutions. The benefits vary for different types of taxpayers:

1. Individuals and HUFs: Both resident and non-resident individuals, as well as Hindu Undivided Families (HUFs), can claim deductions.
2. Companies: Corporate taxpayers can also benefit from these deductions, encouraging corporate social responsibility.
3. Firms: Partnerships and LLPs can claim deductions, promoting philanthropy within business entities.

The deduction can be either 50% or 100% of the donated amount, with or without a qualifying limit, depending on the type of institution or fund to which the donation is made.

List of related income tax deduction sections