Donations entitled for deduction under Section 80G & 80GGA

There is a saying – Giving is not just about making a donation, it’s about making a difference. It is a praiseworthy thing to donate for a reason that ultimately helps a small or large section of the society. To encourage such gestures, the government has brought in rules under the Income-tax Act allowing you to get a tax deduction on the charity and donations made to any Charitable Organizations. In this article, we will discuss Section 80G of the Income Tax Act.

1. Section 80G

Section 80G applies to donations made to specific Relief Funds and Charitable Institutions that can be applied for deduction under Section 80G of the Income Tax Act. This section does not cover all types of donations and charity for deduction under Income Tax.

We will talk about those prescribed funds which are eligible to be considered as deductions under the section.

Now, the question is – “Who can claim such deductions” or you can ask, “Under whose name one can donate the fund to get into eligibility criteria of Section 80G”? The answer would be – This deduction can be claimed by any taxpayer- Individuals, Companies, Firms or any other Person, AOP, Body corporates, etc.

2. How one can donate the funds:

Any donations made in-kind for example,  food, materials, clothes, water, medicines, etc. do not cover under the ambit of this section. The deduction can only be claimed if the funds have been deposited to charitable institutions in cash or cheque. However, there is a bar on contributing in-cash. Any donation made in cash exceeding Rs. 10,000/- will not be qualified as an eligible deduction under this section. 

After demonetization, from the financial year 2017-18, there was an amendment in this section which was as follows: Any contribution made in cash exceeding Rs. 2000/- shall not be considered as a deduction. Any donation for more than the said value should be made in other than cash mode to be considered as a deduction under this section.

Also Read: Which one should you choose: A Trust, Society or Section 8 Company?

Amount of Donation: The various donations specified in section 80G are eligible for a deduction of up to either 100% or 50% with or without restriction, as provided in section 80G.

3. Information required for claiming the deduction

To be able to claim this deduction the following details have to be submitted in your Income Tax Return

• Name of the Donee
• PAN of the Donee
• Address of the Donee
• Amount of Contribution

4. List of Donations to be considered for 100% Deduction without Qualifying Limit under Income Tax Act

• National Defence Fund set up by the Central Government
• Prime Minister’s National Relief Fund
• National Foundation for Communal Harmony
• An approved university/educational institution of National eminence
• 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 Illness Assistance Fund
• 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 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 the earthquake in Gujarat
• Any trust, institution or fund to which Section 80G(5C) applies for providing relief to the victims of the 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)

5. List of Donations to be considered for 50% Deduction without Qualifying Limit

• Jawaharlal Nehru Memorial Fund
• Prime Minister’s Drought Relief Fund
• Indira Gandhi Memorial Trust
• Rajiv Gandhi Foundation

6. Contributions entitled for 100% deduction subject to 10% of Adjusted GTI

• Donations to the government or any approved local authority, institution,
• or association to be utilized to promote family planning.
• Donation by a Company to the Indian Olympic Association or 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.

7. Contributions entitled for 50% deduction subject to 10% of Adjusted GTI

• Any other fund or any institution which satisfies the conditions mentioned in Section 80G(5)
• Government or any local authority, to be utilized for any charitable purpose other than the purpose of promoting family planning
• Any authority constituted in India to deal with and satisfy the need for housing accommodation or for the purpose of planning, development or improvement of cities, towns, villages or both
• Any corporation referred to in Section 10(26BB) for promoting the interest of the minority community
• For repairs or renovation of any notified temple, mosque, gurudwara, church, or other places.

Also Read: All about Income Tax Return and Deductions

8. Section 80GGA

Section 80GGA allows deductions for donations made towards scientific research or rural development. This deduction is allowed to all assessees except those who have an income (or loss) from a business and/or a profession.

Mode of payment: Donations can be made in the form of a cheque or by a draft or in cash; however cash donations over Rs 10,000 are not allowed as deductions. 100% of the amount that is donated or contributed is considered eligible for deductions.

9. Donations Eligible Under Section 80GGA

• Any sum paid to a research association which undertakes scientific research, or a sum paid to a college, university or any other institution to be used for scientific research – all approved by the prescribed authority under section 35(1)(ii).
• Sum paid to a research association which undertakes research in social science or statistical research, or sum paid to a college, university or any other institution to be used for the same purpose,  and these must all be approved by the prescribed authority under section 35(1)(iii).
• Sum paid to an approved association or institution which undertakes any rural development program and is approved under section 35CCA
• Sum paid to an approved association or institution which undertakes training of person(s) to implement rural development programs.
• Sum paid to a public sector company, local authority, or an approved association or institution which carries out projects or schemes approved under section 35AC.
• Sum paid to notified Rural Development Fund.
• Sum paid to notified Fund for Afforestation.
• Sum paid to notified National Poverty Eradication Fund

• If a deduction has been allowed under section 80GGA, such expenses shall not be deductible under any other provision of the income tax act.
• Adjusted Total Income.
• Adjusted total income: Adjusted gross total income is the gross total income (sum of income under all heads) reduced by the aggregate of the following:
• Amount deductible under Sections 80CCC to 80U (but not Section 80G)
• Exempted income.
• Long-term capital gains.
• Income referred to in Sections 115A, 115AB, 115AC, 115AD, and 115D, relating to non-residents and foreign companies.