FAQs on Section 80G – Income Tax Act, 1961
FAQs on Section 80G – Income Tax Act, 1961
(NUDGE Campaign – Donation Deductions)
1. What is Section 80G?
Section 80G of the Income Tax Act, 1961 allows taxpayers to claim deduction for donations made to specified funds, trusts, and charitable institutions while computing total taxable income.
Broad Structure of Section 80G
| Sub-section | Purpose |
|---|---|
| 80G(1) | Explains how the deduction amount is calculated |
| 80G(2) | Lists eligible funds and institutions |
| 80G(4) | Prescribes maximum deduction limits |
| 80G(5) | Specifies conditions for donee institutions |
| 80G(5A) | Prevents double deduction |
| 80G(5D) | Restricts cash donations |
| Explanations | Clarifies verification, charitable purpose, and modes |
2. How is deduction under Section 80G calculated?
- If donations include special notified funds →
100% deduction on such funds + 50% deduction on remaining eligible donations - If donations are only to other eligible institutions →
50% deduction on total eligible donations
3. What donations qualify under Section 80G?
Only donations made to funds/institutions specified in Section 80G(2) or registered and approved under Section 80G qualify.
4. What is the maximum deduction limit?
For certain categories of donations, the total deduction is restricted to 10% of Adjusted Gross Total Income (AGTI).
Any amount exceeding this limit is not allowed as deduction.
5. What conditions must an institution satisfy to qualify under Section 80G?
The institution must:
- Have income exempt under Sections 11, 12, 10(23AA) or 10(23C)
- Use funds only for charitable purposes
- Not benefit any specific religion or caste
- Maintain regular books of accounts
- Be properly registered (Trust / Society / Company / University)
- Hold valid approval from the Income Tax Department
- File prescribed statements (Form 10BD)
- Issue Donation Certificate – Form 10BE
6. Can the same donation be claimed twice?
❌ No.
A donation claimed under Section 80G cannot be claimed under any other section of the Act.
7. Is cash donation allowed under Section 80G?
- ❌ Cash donations above ₹2,000 are NOT eligible
- ✅ Accepted modes: Cheque, Demand Draft, UPI, Net Banking, Electronic modes
8. What is meant by “Charitable Purpose”?
Charitable purpose does not include activities that are wholly or substantially religious in nature.
9. Are donations in kind eligible?
❌ No.
Only monetary donations qualify for deduction under Section 80G.
10. Who can claim deduction under Section 80G?
Any taxpayer having taxable income:
- Individual
- HUF
- Company
- Firm
- Any other assessee
11. Types of donations under Section 80G
| Category | Deduction | Limit |
|---|---|---|
| 100% deduction | Full amount | No limit |
| 50% deduction | 50% of amount | No limit |
| 100% deduction | Full amount | Subject to 10% AGTI |
| 50% deduction | 50% of amount | Subject to 10% AGTI |
12. Examples of 100% deduction (No Limit)
Includes donations to:
- National Defence Fund
- PM National Relief Fund / PM CARES Fund
- Clean Ganga Fund
- Swachh Bharat Kosh
- National Children’s Fund
- Armed Forces Welfare Funds
(Complete list provided in Annexure-1)
13. Examples of 50% deduction (No Limit)
- Prime Minister’s Drought Relief Fund
(Certain sub-clauses omitted w.e.f. 01-04-2023)
14. Donations eligible for 100% deduction with limit
- Donations for family planning to Government or approved bodies
- Donations by companies to sports infrastructure and sponsorship
15. Donations eligible for 50% deduction with limit
Includes:
- Approved charitable trusts/institutions
- Government or local authority for charitable purposes (other than family planning)
- Housing and urban development authorities
- Corporations under Section 10(26BB)
- Renovation of notified historic religious places
16. How does the Income Tax Department verify 80G claims?
Verification is done through Form 10BD filed by the donee.
Your deduction claim must match the details reported by the donee.
17. Is Section 80G deduction available under the new tax regime?
❌ No.
Deduction under Section 80G is not available if you opt for the new tax regime (Section 115BAC).
18. How to claim Section 80G in ITR?
- Go to Deductions under Chapter VI-A
- Select Section 80G
- Enter donee and donation details
19. Documents required to claim 80G
- Donation receipt / Form 10BE
- Name & PAN of donee
- Donee address
- 80G Registration Number
- Amount donated
20. Can excess donation be carried forward?
❌ No.
Any amount exceeding the qualifying limit cannot be carried forward.
21. What if the donee loses its 80G registration?
Donations made after cancellation or expiry of 80G approval are not eligible.
22. What is Adjusted Gross Total Income (AGTI)?
AGTI = Gross Total Income
Less:
- Deductions under Chapter VI-A (except 80G)
- Exempt income
- LTCG
- STCG under Section 111A
- Income taxed under Sections 115A to 115D
23. How to calculate deduction under Section 80G?
- Compute Gross Total Income
- Calculate Adjusted GTI
- Compute 10% of AGTI (Qualifying Limit)
- Apply deduction rates based on donation category
List of Funds Eligible for 100% Deduction without Limit
(24 notified funds including PM CARES Fund, National Defence Fund, Swachh Bharat Kosh, Clean Ganga Fund, National Trust for Disabilities, etc.)
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