SECTION 80G OF INCOME TAX ACT, 1961
Deductions in respect of donations to certain funds, charitable institutions, etc.
Individuals who make donations to specified funds and trusts are eligible for tax breaks under Section 80G of the Income Tax Act of 1961.The amount of deduction allowed is equal to the amount donated, subject to the norms specified in the section. The benefits of this deduction are available if the donor complies with the section’s requirements.
Some of the essential requirements that need to be fulfilled in order to qualify for a deduction under this section are as follows:
- The donation must be made to a “qualified trust or fund” as defined under this section. This can include a trust or fund established by the central government, any state government, the local authority, or any other body approved by the central government on its behalf for charitable or religious purposes.
- The person making the donation must have a valid Permanent Account Number (PAN).
- The donation must be made either by cheque or demand draft. Cash donations can be made, but they should not be more than 2,000 rupees.
- To claim a deduction for a donation made to a trust or fund, the trust or fund must have a registration certificate granted by the central government under Section 80G.
- The trust or fund should also provide the donors with an authorization certificate.
List of donations made to following organization are eligible for 100% Deduction:
- National Defense Fund set up by the Central Government
- Prime Minister’s National Relief Fund
- The Prime Minister’s Armenia Earthquake Relief Fund
- Africa (Indian Contributions) Fund
- National Children’s Fund
- National Illness Assistance Fund
- An approved university or educational institution of national eminence.
- National Sports Fund
- National Cultural Fund
- Zila Saksharta Samiti is constituted in any district under the chairmanship of the Collector of that district.
- The Army Central Welfare Fund, the Indian Naval Benevolent Fund, or the Air Force Central Welfare Fund
- Andhra Pradesh Chief Minister’s Cyclone Relief Fund, 1996
- Fund set up by a state government for the medical relief to the poor.
- National Blood Transfusion Council or to any State Blood Transfusion Council.
- National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation, and Multiple Disabilities.
- National Foundation for Communal Harmony
- 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 the earthquake in Gujarat.
- 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).
- Fund for Technology Development and Application
- Chief Minister’s Relief Fund or Lieutenant Governor’s Relief Fund with respect to any State or Union Territory.
- The Maharashtra Chief Minister’s Relief Fund between October 1, 1993, and October 6, 1993.
List of donations made to following organizations are eligible for 50% deduction:
- Prime Minister’s Drought Relief Fund
- Jawaharlal Nehru Memorial Fund (JNMF)
- Indira Gandhi Memorial Trust (INMT)
- Rajiv Gandhi Foundation (RGF)
List of donations made to following organization are eligible for a 100% deduction up to 10% of adjusted gross total income:
- Donations to the government or a local authority for the purpose of promoting family planning.
- Sums paid by a company to the Indian Olympic Association.
- Swachh Bharat Kosh (from Assessment Year 2015-16)
- Clean Ganga Fund (from Assessment Year 2015-16)
- National Fund for the Control of Drug Abuse (from Assessment Year 2016–17)
List of donations made to following organization are eligible for a 50% deduction up to 10% of adjusted gross total income:
- Donation to the Government or any local authority to be utilized by them for any charitable purposes other than the purpose of promoting family planning.
- Any authority mentioned in Section 10(20A) for the purpose of dealing with and meeting the need for housing accommodations, or for planning or developing towns and villages,
- Any corporation specified in Section 10 (26 BB) for promoting the interests of the minority community.
- Any notified temple, mosque, gurudwara, church, or other place (for renovation or repair)
How to calculate Adjusted Gross Total Income:
Gross Total Income, to be reduced by the following:
- Deduct all amounts under Sections 80CCC to 80U (except that under Section 80G).
- Exempt income under Section 10
- Long-term capital gains
- Short- term capital gains are taxable at per cent under section 111A.
- Income referred to in Sections 115A, 115AB, 115AC, and 115AD relating to non-residents and foreign companies.
