Section 80G of the Income Tax Act offers tax deduction on contributions made to certain charitable institutions prescribed under the act.
Any taxpayer can claim this tax deduction.
Mode of donation
Donations made in the form of cash or cheque are eligible for tax deduction. However, donations made in cash or kind do not qualify for a tax deduction exceeding Rs. 10,000.
Amount of deduction
Some donations qualify for either 50% or 100% tax deduction whereas some others qualify for the same deduction but up to a maximum limit of 10% of Adjusted Gross Total Income of the taxpayer. So, broadly they can be divided into 4 categories. It can be understood with the help of following illustration:
What is Adjusted Gross Total Income?
You can find Adjusted Gross Total Income by using the following formula:
|Gross Total Income
|Less: Long Term Capital Gain
|Less: Short Term Capital Gain on sale of shares u/s 111A
|Less: Deductions u/s 80C to 80U (except u/s 80G)
|Adjusted Gross Total Income
|Less: Deduction u/s 80G
|Total Taxable Income
A donation falls in any of the 4 categories mentioned earlier depending upon the type
of institution to which the amount is donated. The institutions are categorized below:
Prescribed funds & institutions under Section 80G
Donations which qualify for 100% deduction without any upper limit:
- National Illness Assistance Fund
- National Blood Transfusion Council or to any State Blood Transfusion Council
- National Defence Fund set up by the Central Government
- Prime Minister's National Relief Fund
- National Foundation for Communal Harmony
- Zila Saksharta Samiti constituted in any district under the chairmanship of the Collector of that district
- Fund set up by a State Government for the medical relief to the poor
- National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities
- An approved university/educational institution of National eminence
- National Sports Fund
- National Cultural Fund
- Fund for Technology Development and Application
- National Children's Fund
- Chief Minister's Relief Fund or Lieutenant Governor's Relief Fund with respect to any State or Union Territory
- 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
- The Maharashtra Chief Minister's Relief Fund during October 1, 1993 and October 6, 1993
- Chief Minister's Earthquake Relief Fund, Maharashtra
- Any fund set up by the State Government of Gujarat exclusively for providing relief to the victims of earthquake in Gujarat
- Any trust, institution or fund to which Section 80G(5C) applies for providing relief to the victims of earthquake in Gujarat (contribution made during January 26, 2001 and September 30, 2001) or
- Prime Minister's Armenia Earthquake Relief Fund
- Africa (Public Contributions - India) Fund
- Swachh Bharat Kosh (applicable from FY 2014-15)
- Clean Ganga Fund (applicable from FY 2014-15)
- National Fund for Control of Drug Abuse (applicable from FY 2015-16)
Donations which qualify for 50% deduction without any upper limit
- Jawaharlal Nehru Memorial Fund
- Prime Minister's Drought Relief Fund
- Indira Gandhi Memorial Trust
- Rajiv Gandhi Foundation
Donations which qualify for 100% deduction subject to 10% of adjusted gross total income:
- Government or any approved local authority, institution or association to be utilised for the purpose of promoting family planning.
- Donation by a Company to the Indian Olympic Association or to any other notified association or institution established in India for the development of infrastructure for sports and games in India or the sponsorship of sports and games in India.
Donations to the following institutions are eligible for 50% deduction subject to 10% of adjusted gross total income:
- Any other fund or any institution which satisfies conditions mentioned in Section 80G(5)
- Government or any local authority to be utilised for any charitable purpose other than the purpose of promoting family planning
- Any authority constituted in India for the purpose of dealing with and satisfying the need for housing accommodation or for the purpose of planning, development or improvement of cities, towns, villages or both
- Any corporation referred in Section 10(26BB) for promoting interest of minority community
- For repairs or renovation of any notified temple, mosque, gurudwara, church or other place
Can I claim donations made to political parties under this section?
Donations made to political parties can be claimed but not under this section. Section 80GGC offers tax deduction for donations made to political parties. To know more, click here.
Can I claim deduction for donation made to entities in scientific research?
Yes but not under this section. Section 80GGA allows deduction for donation made for scientific research. To know more, click here.