Donating for Social Cause and Saving on Tax under Section 80G

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The pandemic situation has led many poor workers to lose their jobs and livelihood and amid this situation donation has played a vital role to meet their daily necessities. So to encourage this and keeping in mind the interest of donors, Income Tax Act, 1961 have introduced Section 80G dealing with deductions related to donations made for social and charitable cause.

Table of Content

Applicability of Section 80G 

All the assessees, whoever makes the eligible donation under this section are entitled to get a tax deduction under this section. Here, donation made to any foreign trust is not eligible for any deduction. Wherein, Non Resident Indians are eligible for deduction provided that they donate to an eligible institution and fund. Eligible institutions or trust means the trust, society, charitable institutions registered under section 12AB or Section 8 companies. This Deduction can be claimed by any taxpayer- individuals, company, firm or any other person.

Maximum donation Allowable under Section 80G

As such there is no upper limit on the amount of donation made, however if the amount of donation exceeds 10% of the adjusted gross total income, the amount exceeding the former limits will not allowed as  deduction.

Also, any donation made in excess of Rs. 2000 in cash will not be allowed as deduction.

Amount of deduction allowed under Section 80G

Section 80G provides certain qualifying limits i.e. some donations are eligible for 100% deduction with or without qualifying limits while others are eligible for 50% deduction with or without qualifying limits. The following table provides details about the list of eligible institutions under various qualifying limits.

Qualifying limits Eligible Institutions
100%  without  any qualifying limit
  1. Prime Minister’s National Relief Fund
  2. National Defence Fund set up by Central Government.
  3. Prime Minister’s Armenia Earthquake Relief Fund
  4. The Africa (Public Contribution – India) Fund
  5. National Children’s Fund
  6. The National Foundation for Communal Harmony
  7. Approved university or educational institution of national eminence
  8. The Chief Minister’s Earthquake Relief Fund, Maharashtra
  9. Any fund set up by the State Government Of Gujarat for providing reliefs to the victims of earthquake in Gujarat.
  10. Fund set up by the State Government for the medical relief to the poor.
  11. Donations made to Zila Saksharta Samitis.
  12. The National Blood Transfusion Council or a State Blood Transfusion Council.
  13. The Army Central Welfare Fund or the Indian Naval Benevolent Fund or The Air Force Central Welfare Fund.
  14. National Illness Assistance Fund
  15. Chief Minister’s or Lt. Governor’s Relief Fund
  16. National Sports Fund
  17. National Cultural Fund
  18. Central Govt.’s Fund for Technology Development & Application
  19. National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation & Multiple Disabilities
  20. Andhra Pradesh Chief Minister’s Cyclone Relied Fund

Also donation under PM or CM COVID relief fund will also be allowed under this category.
100% deduction subject to 10% of adjusted gross total income
  1. Donations to the Government or a local authority for the purpose of promoting family planning.
  2. Sums paid by a company to Indian Olympic Association.
  3. Swachh Bharat Kosh ( From A.y 2015-16)
  4. Clean ganga Fund ( From A.y 2015-16)
  5. National Fund For control of drug abuse (From A.y 2016-17)
50% deduction without any limits
  1. Jawaharlal Nehru Memorial Fund
  2.  Prime Minister’s Drought Relief Fund
  3.  National Children’s Fund
  4.  Indira Gandhi Memorial Trust
  5.  The Rajiv Gandhi Foundation
50% deduction subject to 10% of adjusted gross total income
  1. 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.
  2. Any Authority referred to in section 10(20A) for the purpose of dealing with and satisfying the need for housing accommodation or for the purpose of planning/development of town and village.
  3. Any Corporation specified in section 10(26BB) for promoting interest of minority community
  4. Any notified temple, mosque, gurudwara church or other place (for renovation or repair)

    

Note: Adjusted income here means gross total income reduced by 

  • Amount of deduction allowed under Sections 80CCC to 80U (but not Section 80G)
  • Exempted income
  • Long-term capital gains
  • Short- term capital gains taxable @15 per cent under section 111A.
  • Income under sections 115A, 115AB, 115AC, 115AD relating to non-residents and foreign companies.

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