The amount donated towards charity attracts deduction under section 80G of the Income Tax Act. Section 80G has been in the law book since financial year 1967-68 and it seems it’s here to stay. Several deductions have been swept away but the tax sop for donations appears to have survived the axe. The main features of tax benefit with respect to charity are as follows:

Who can get a tax break?

Any person or ‘assessee’ who makes an eligible donation is be entitled to get tax deductions subject to conditions. This section does not restrict the deduction to individuals, companies or any specific category of taxpayer.

Which donations can get you a tax break?

There are thousands of trusts registered in India that claim to be engaged in charitable activities. Many of them are genuine but some are untrue. In order that only genuine trusts get the tax benefits, the Government has made it compulsory for all charitable trusts to register themselves with the Income Tax Department. And for this purpose the Government has made two types of registrations necessary. Only if the trust follows the registration, they will get the tax exemption certificate, which is popularly known as 80G certificate.

How much deduction will I get if I donate?

Firstly, a taxpayer claiming deduction under section 80G should find out the donation amount that qualifies for the deduction. He has to compute the actual donation with reference to the qualifying amount. For this purpose, donations can be broadly divided into two categories:

1. Donations to private trusts

Step 1: Find out the qualifying amount

The qualifying amount under this category will be lower of the the following two amounts:

a) The amount of donation

b) 10 per cent of the gross total income as reduced by all other deductions under Chapter VI-A of the Income Tax Act such as 80C (PPF, LIC etc.), 80D (mediclaim), 80CCC (pension schemes etc.

For example, a taxpayer named Laxmi Sharma has taxable salary of Rs 500,000. He has deposited Rs 40,000 in Public Provident Fund and Rs 60,000 in his company provident fund. He donates Rs 45,000 to CRY (Child Relief & You) trust. Presuming he has no other income, his taxable income will be computed as under:

Gross salary Rs 500,000
Less: Deduction under section 80C restricted to Rs 100,000
Gross total income (before 80G) Rs 400,000

After making donation to CRY, his qualifying amount for 80G will be:

Actual amount of donation Rs 45,000
10% of Gross total income as computed above Rs 40,000 whichever is lower

Since 40,000 is lower, the qualifying amount will be Rs 40,000

Step 2: Find out actual deduction

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The next question that arises is how much would be the actual deduction? In the case of donations to private trusts, the actual amount of donation would be 50 per cent of the qualifying amount.

Therefore, in the example given above, since the donation is made to a private trust, the deduction will be 50 per cent of the qualifying amount ie 50 per cent of Rs 40,000 = Rs 20,000.

So,

Gross total income (Before 80G) Rs 400,000
Less: deduction under section 80G Rs 20,000
Total income (taxable income) Rs 380,000

Step 3: Check upper limit

Finally, the deduction under section 80G cannot exceed your taxable income. For example, if your income before deduction is Rs 3 lakh and if you have given donation of Rs 5 lakh to the Prime Minister’s National Relief Fund, please do not expect to claim a loss of Rs 2 lakhs. Your income will be NIL (Rs 3 lakh – Rs 3 lakh). The deduction will be restricted to the amount of your income.

ii) Donations to trusts/funds set up by the Government
In this category, the entire amount donated i.e. 100 per cent of the donation amount is eligible for deduction. There is a long list of 21 funds/institutions/purposes for which donations given would qualify for 100 per cent eligibility. Notable among this list are:

– The National Defense Fund

– The Prime Minister’s National Relief Fund

– Any fund set up by the State Government of Gujarat for earthquake relief

The funds that figure in this long list are all set up by the Government. Private Trusts do not figure in this list.

Thus, in this category of donations, the ceiling of 10 per cent of the gross total income as reduced by all other deductions under Chapter VI-A of the Income Tax Act does not apply.

In the above example, if instead of donating to CRY, had the donation been given to say, The Prime Minister’s National Relief Fund, then the calculations would have different as shown below:

Gross Total Income (Before 80G) Rs 400,000
Less: Deduction under section 80G Rs 45,000
Total Income (Taxable Income) Rs 355,000

iii) Donations to approved research organizations:

There are special sections for businessmen and professionals who earn income under the head Profits and Gains of Business or Profession. Section 35AC and 35CCA allow a deduction of 100 per cent of the amount donated for scientific research and rural development to approved research organisations. For this, the research organisation requires the approval of the Government.

Those who do not have any business or professional income (like salaried persons), donations can be given to such organisations and 100 per cent deduction can be claimed under section 80GGA.

What points should I keep in mind for claiming deduction?

Following points must be borne in mind:

i) A stamped receipt is a must:

– For claiming deduction under Section 80G, a receipt issued by the recipient trust is a must. The receipt must contain the name and address of the Trust, the name of the donor, the amount donated (please ensure that the amount written in words and figures tally).

– The most important requirement is the Registration number issued by the Income Tax Department under Section 80G. This number must be printed on the receipt.

The donor must ensure that the registration is valid on the date on which the donation is given. However With Effect from 1st October 2009 it is not required for a trust to apply for renewal of 80G certificate, if the same is valid on 01.10.2009 or valid upto a date thereafter unless department specifically ask Trust to apply for renewal.  So Old 80G certificate will remain valid if the same is valid on 01.10.2009.

So, please check the validity period of the 80G certificate. Always insist on a photocopy of the 80G certificate in addition to the receipt.

ii) Only donations in cash/cheque are eligible for the tax deduction:

Donations in kind do not entitle for any tax benefits. For example, during natural disasters such as floods, earthquake, many organisations start campaigs for collecting clothes, blankets, food etc. Such donations will not fetch you any tax benefits. No deduction under this section is allowable in case of amount of donation if exceeds Rs 10000/- unless the amount is paid by any mode other than cash.

(Republished with Amendments)

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20 responses to “Section 80G Deduction For Donation made”

  1. Priyanka SIngh says:

    Hi, the SANSKAR VIHAR SOCIETY an not-for profit organization registered at NCT Delhi. we are looking for donors who can donate for deprived women and child development and care. donors who donate to our organization gets 80G certificate which gives them 50% benefits on their taxable income. plz contact who are interested in 80G certificate and donating. donate@svsngo.org or 01140158373 for queries n details call now.

  2. Sridhar Sundaragopalan says:

    30.07.17
    Mr. Tax Guru

    I would like to have listed of genuine Institutions are accepting donetions and or eligible to provide me with tax exemption certificate.

    Thanks
    Sridhar.S
    gtechengg1@gmail.com

  3. BANWARI LAL says:

    my gross income is 672390/-and u/c80c saving 150000/- tell me donation amount so i eligible for 5000/rebate u/c 80 g. witch document are require send details.please.

  4. Apurv says:

    I want to donate amount for Cancer Hospital. I want to know what are the Income tax benefit to me and under which section of IT.

  5. B k saha says:

    If I donate Rs.4000/-as ashram development to R K Mission of aNY state in India then how many amount may I get deduction from I Tax amount B saha

  6. Suman Socialist says:

    Hi, the SANSKAR VIHAR SOCIETY an not-for profit organization registered at NCT Delhi. we are looking for donors who can donate for deprived women and child development and care. donors who donate to our organization gets 80G certificate which gives them 50% benefits on their taxable income. plz contact who are interested in 80G certificate and donating. donate@svsngo.org or 9818103512 for queries n details call now.

  7. Arvind Khedekar says:

    I have donated to private trust. Nane of the trust comes under 100% list.
    Total taxable income is 750000. Donation paid is 25000. In online form where
    I have show this amount. Trust name Shree Aniruddha Upasana Foundation.

  8. Gayatri sawant says:

    hi, we are vision support charitable trust.we are looking for donors who can donate for children suffering from cancer.donors who donate to our organization gets 80g certificate which gives them 50% benefits on their tax. plz contact who are interested in 80g certificate and donating. charitabletrust.k1@gmail.com or 9819713887
    visit website – http://www.visionsuppor.org .for quiries n details call now.

  9. Arcot K Balraj says:

    1. I met with a freak accident on Dec 12, 2014 in Hyderabad.

    2. This freak accident resulted in fracture, muscle tear and tendon damage to both ring and little fingers of my left hand. In addition, the little finger nail and nail-bed got chopped off.

    3. The surgery (re-construction of fingers) to both the fingers and amputation to the tip of my little finger were done. This incurred a total expenditure of Rs. 48,804/-, excluding the subsequent cab and auto fares for a period of one month to commute to the office and back.

    4. Since I had Star Health Insurance coverage, my claim was settled at
    35,509/- only as against the total medical actual expenditure of Rs. 48,804/-.

    Now, I request you to advise me on the possible provisions / sections in the income tax that would enable me to claim

  10. parminder khaira says:

    sir my D D O deduct recovery from my salary RS 48805 in the the year 2014 to 2015 can I would take rebate from income tax

  11. Akruthi I S says:

    Sir, I made a donation of Rs.20000/- to Matha Amrithanandamayi Math through DD. Whether I am eligible to claim the same under Section 80G. If so what is the procedure. I am having the receipt of drawing DD. Is it not sufficient to claim the same.

  12. T N Singh says:

    Sir
    I have made an donation of 103500/- to Sri Ramkrishna Mission Seva Pratishtan in FY 2011-12.
    I wanna know that whether this donation amount is eligibe for 100% deduction u/s 80G without applying any qualifying limits.

  13. s mitra says:

    sir,

    let me know the tax amount of a Gr A government employee with total basic pay Rs.245120, gr pay Rs 64800/-, DA Rs. 176324/-, HRA received Rs. 61984/-, Transport allowance Rs 29546. His GPF cont is Rs 96000/-. CGEGIS cont Rs 1440/- P tax 2400/-, Paying Rent @ Rs9000/- per month, Paying Education loan interest & HBA loan interest Rs 9600/- & Rs.18000/-.

  14. P.P.Sugumar says:

    Sir,
    Our organization is eligible to get Donations under sec. 80 G. In our certificate it is mentioned that,in the receipts issued to the donor, the fact that the deduction will be eligible for donations received should be mentioned. Can you suggest us how our receipt should be printed and given to our donor.

  15. BHAKTI says:

    I would like to know if the org is not u/s 35AC but has a registration for 80G how can the deduction be claimed by a salaried employee?

  16. CA. Subhash Chandra Podder says:

    Read carefully , study the case, apply your knowledge get it done. If not consult with appropriate authority . All may not be available as like as Instant tea and/or coffee. Use your ATM card , insert in to the ATM machine , press your PIN, get money. Tax Laws are not as like as ATM. as simple , but not complex even . Enhance your knowledge . Knowledge is Power.
    CA. Subhash Chandra Podder
    14/12/2011

  17. Abhay Raj says:

    Dear Sir/maim,
    I have a NGO “Raj Gramodhog Vikas Samiti”
    Darshan Nagar ,Faizabad 224135 Uttar Pradesh (INDIA)
    I have the registration of FCRA . you can check on
    [www.mha.nic.in]
    My file no. : NoII/21022/73(0145)/2008 FCRA – II
    &
    Ac/no. of UTI bank :37007610001542
    Sir, i want to development of rural areas…
    Can you help me ,,,,,
    I have also 12AA registration & 80G registration
    If you have any type of rural development work, Plz call me
    Sir my cell no. 9336659797

  18. RAJESH SHARMA says:

    I want to know the tax benifits, the donor gets if he donates under 35 ac to an NGO.How to calulate the tax under 35 AC

    • Kalyani Life Institute says:

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      It is not an advertisement of any product.
      It is an organization originated from concepts and agonies of parents of some Autistic, Mentally Retarded and Cerebral Palsy children.
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      We, all have children with different disabilities except Chandan Chatterjee, Sanjoy Mallick
      So we have united.
      We want to see those babies recovered; we shall not allow anybody to dupe us for our ignorance.
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  19. dabas says:

    Sir,
    In the Govt. Sector FY is being counted from March to February for salary earner people. One of our employee has donated Rs. 6,000/- to CRY (Child Rights & You)on 06/03/2010 through Cheque. Request to kindly let us know (a)whether he is entitled to get exemption relief or not since the tax against Feb 10 salary has already been depostied with the Govt. (b) How much amount of donation is eligible for exemption of Tax (whether 100% or 50%). (c) Can we may consider above stated amount in the next FY 2010-11.

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