Section 80G of the Act, inter alia, provides for the procedure for granting approval to certain institutions and funds receiving donation and the allowable deductions in respect of such donations to the assessee making such donations.
2. Sub-section (2) of section 80G of the Act, inter alia, provides the list of these funds to which any sum paid by the assessee in the previous year as donations is allowed as a deduction to an extent of 50 per cent/100% of the amount so donated.
3. It has been observed that there are only three funds based on names of the persons in the said section. In order to remove such funds, it is proposed to omit sub-clauses (ii), (iiic) and (iiid) of clause (a) of sub-section (2) of section 80G of the Act.
4. This amendment will take effect from the 1st day of April, 2024 and shall accordingly, apply in relation to the assessment year 2024-25 and subsequent assessment years.
[Clause 40]
Extract of relevant clause of Finance Bill 2023
Clause 40 seeks to amend section 80G in the Income-tax Act relating to deduction in respect of donations to certain funds, charitable institutions, etc.
Sub-section (2) of the said section, inter alia, provides the names of the funds to which any sum paid by the assessee in the previous year as donation is allowed as a deduction to an extent of fifty per cent. of the amount so donated.
It is proposed to omit sub-clauses (ii), (iiic) and (iiid) of clause (a) of the said sub-section.
This amendment will take effect from 1st April, 2024 and will, accordingly, apply in relation to the assessment year 2024-2025 and subsequent assessment years.
Extract of Relevant Amendment Proposed by Finance Bill, 2023
40. Amendment of section 80G.
In section 80G of the Income-tax Act,–
(I) in sub-section (2), in clause (a), sub-clauses (ii), (iiic) and (iiid) shall be omitted with effect from the 1st day of April, 2024;
(II) in sub-section (5),–
(A) with effect from the 1st day of October, 2023,–
(i) in the first proviso, for clause (iv), the following clause shall be substituted, namely:–
“(iv) in any other case, where activities of the institution or fund have–
(A) not commenced, at least one month prior to the commencement of the previous year relevant to the assessment year from which the said approval is sought;
(B) commenced and where no income or part thereof of the said institution or fund has been excluded from the total income on account of applicability of sub-clause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via) of clause (23C) of section 10 or section 11 or section 12 for any previous year ending on or before the date of such application, at any time after the commencement of such activities:”;
(ii) in the second proviso,–
(a) in clause (ii),–
(1) in the opening portion, after the word, brackets and figures “clause (iii)”, the words, brackets, figures and letter “or sub-clause (B) of clause (iv)” shall be inserted;
(2) in sub-clause (b), for item (B), the following shall be substituted, namely:–
“(B) if he is not so satisfied, pass an order in writing,–
(I) in a case referred to in clause (ii) or clause (iii) of the first proviso, rejecting such application and cancelling its approval; or
(II) in a case referred to in sub-clause (B) of clause (iv) of the first proviso, rejecting such application,
after affording it a reasonable opportunity of being heard;”;
(b) for clause (iii), the following clause shall be substituted, namely:–
“(iii) where the application is made under sub-clause (A) of clause (iv) of the said proviso or the application is made under clause (iv) of the said proviso as it stood immediately before its amendment vide the Finance Act, 2023, pass an order in writing granting it approval provisionally for a period of three years from the assessment year from which the approval is sought,”;
(B) in the third proviso, for the words “first proviso”, the words “second proviso” shall be substituted.
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