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Charity or giving donations is a beautiful deed. It not only brings peace of mind and inner happiness but also allows people to earn tax exemptions from the government under section 80G. Giving charity or donation for a good cause allows people to do a bit for society, which is a noble gesture.
To encourage this noble gesture and to support people with more charity for different causes, the government has allowed tax deductions against contributions done towards some charitable organizations and relief funds. Section 80G of the Income Tax Act offers tax exemptions for donations.
Having said that, you may also note that not all donations are eligible for deductions under section 80G. Donations made to some specific funds/associations/institutions are only eligible for deduction under 80G. Let’s read more about section 80G in this post.
Table of Contents Show
Taxpayers who can claim 80G exemptions include:
You may note that section 80G of the Income Tax Act does not let you avail deductions on all donations. As discussed below, some prescribed funds only qualify as a deduction under this section. Also, you may note that deductions under section 80G are available only when you opt for the old tax regime and are not available under the new tax regime.
Exemptions under sec 80G of the Income Tax Act can be claimed if the donation is paid in terms of money and not in kind, and it should be paid either through cheque, demand draft, electronic payment mode, or cash (below INR 2000)
You may note that donations made in kind, as well as donations above INR 2000, are not accepted for deductions u/s 80G. Also, if you want to make donations above INR 2000, you must pay in any mode other than cash to qualify for 80G deductions.
Note that section 80G deductions for donations are available for up to 100% or, in some cases, 50% only. You may also face some restrictions for such deductions. It is important to keep receipts of such deductions containing the donation amount and the name and address of the fund/institution where the donation is made.
You may also like to check the eligibility and the limit of such donations to be made to avail of the maximum exemptions. The exemption limit may differ depending on the organization you are donating to.
The process to claim deduction under section 80G requires the applicant to submit the below details while filing your income tax return (ITR):
All the above details should be mentioned in the respective tables in the ITR while filing it. The ITR has different tables for different donations, as mentioned below:
Table A |
Donations that allow up to 100% tax deduction without a qualifying limit |
Table B |
Donations that allow up to 50% deduction without a qualifying limit |
Table C |
Donations that allow up to 100% deduction as per the qualifying limit |
Table D |
Donations that are entitled to up to 100% deduction as per the qualifying limit |
Below is the list of donations that allow a taxpayer the option to avail of up to a 100% tax deduction without a qualifying limit:
Besides the above, some donations are eligible for a 100% deduction as per the 10% adjusted gross total income. These include:
Similarly, some donations are eligible for a 50% deduction as per 10% adjusted gross total income. These include:
Taxpayers eligible to claim tax exemption u/s 80G should have the documents mentioned below:
A receipt from the charitable trust or association where the donation was made is a must for the taxpayer to present. The receipt should have details such as the name of the person who is donating, their address, the amount donated, the PAN number of the trust to whom the donation is made, etc.
Form 58 is another requirement for claiming tax exemption under section 80G for claiming a 100% deduction
All trusts/associations do have a registration number given by the Income Tax Department, which must be mentioned in the receipt of the donation
The budget 2023 announced that donations made to the below-mentioned funds are not eligible for 80G deductions:
Donations that are eligible for a 50% deduction without any qualifying limit:
Donations made towards rural development or scientific research come under Section 80GGA of the Income Tax Act. The deductions under this category are allowed to every taxpayer except those who have experienced a loss at work.
Cheques, demand drafts, cash, and online transfers are the various modes of payment that can be used for paying donations under section 80GGA. However, if the cash amount for donations is beyond INR 2,000, it is not allowed for deduction. Also, note that 100% of the donated amount is eligible for deductions.
Section 80GG deductions are allowed on the lowest of the below-mentioned amounts:
Adjusted gross total income is the sum of all income under all heads minus the below amounts:
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No, if you make donations to a foreign trust, you will get no deduction u/s 80G.
Yes, 80G deductions can be claimed through your employer. You might have to furnish a certificate from your employer stating that you are making the 80G donation from your salary.
Yes. Firms, including partnership firms, companies, as well as individuals, can claim deductions u/s 80G.
No, deduction under section 80G is not allowed to taxpayers opting for the new tax regime.
Yes, NRIs can claim tax deductions against donations offered to Indian NGOs u/s 80G. However, in most cases, the amount deposited should be in INR.
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