Section 80G and 80GGA Deductions Under Income Tax Act

Under the Income Tax Act, Section 80G offers deductions on donations to approved funds, trusts, and institutions, allowing taxpayers to claim 50% or 100% of the donated amount as per eligibility. Section 80GGA further extends benefits for contributions made towards scientific research and rural development. Together, these provisions promote social welfare and research support while lowering tax liability under the old regime.

Key Highlights

• Not Eligible: In-kind contributions (food, clothes, medicines, etc.) and cash donations above Rs. 2,000.
• Restriction under 80GGA: Not available if the taxpayer has income from business/profession or opts for the new regime.
• Both sections encourage philanthropy, research, and rural development while reducing tax liability.

What is Section 80G?

• Section 80G of the Income Tax Act, 1961 allows taxpayers to claim deductions on donations made to specified funds, charitable institutions, and relief organisations.
• Eligible Taxpayers:
  • Individuals
  • Companies
  • Firms
  • Hindu Undivided Firm (HUF)
  • Non-Resident Indian (NRI)
  • Any other person
• Depending on the donee, a deduction can be claimed up to 100% of the donation or 50% of the donation, subject to the applicable restrictions.
• Even full donations paid to certain funds can be claimed as a deduction under this section (without maximum limits), thus significantly reducing the overall tax liability.
• Donors must ensure they obtain a valid receipt containing details such as the name, PAN, and 80G registration number of the institution.
• This section helps promote philanthropy by reducing the effective cost of charitable contributions while ensuring transparency in donations.
• Deductions under this section are allowed only under the old tax regime.

Mode of Payment Under Section 80G

Section 80G deductions can be claimed by taxpayers when they make donations through the following modes:

• Cheque
• Demand draft
• Cash (for donations up to Rs 2,000)

Important Notes:

1. In-kind contributions such as food, material, clothes, medicines etc., and donations of above Rs 2,000 in cash they do not qualify for deduction under Section 80G.
2. Donations above Rs 2,000 should be made in any mode other than cash to qualify under Section 80G.

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

List of Donations Eligible for 100% Deduction without Qualifying Limit

• National Defence Fund set up by the Central Government
• Prime Minister's National Relief Fund and PM CARES 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 medical relief to the poor
• National Illness Assistance Fund
• National Blood Transfusion Council or 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 between January 26, 2001, and September 30, 2001)
• 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)

List of Donations Eligible for 50% Deduction without Qualifying Limit

• Prime Minister's Drought Relief Fund

List of Donations Eligible for 100% Deduction Subject to 10% of Adjusted Gross Total Income

• Donations to the government or any approved local authority, institution or association to be utilised to promote family planning
• Donation by a company to the Indian Olympic Association or any other notified association or institution established in India to develop infrastructure for sports and games in India or sponsor sports and games in India.

List of Donations Eligible for 50% Deduction Subject to 10% of Adjusted Gross Total Income

• Any other fund or institution satisfies the conditions mentioned in Section 80G(5).
• Government or any local authority, to be utilised for any charitable purpose other than promoting family planning.
• Any authority constituted in India to deal with and satisfy the need for housing accommodation or 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.

What is Adjusted Total Income?

Adjusted gross total income is the gross total income (sum of income under all heads) reduced by the total of the following:

• Amount deductible under Sections 80C to 80U (but not Section 80G)
• Exempt income
• Long-term capital gains
• Short-term capital gains u/s 111A
• Income referred to in Sections 115A, 115AB, 115AC, 115AD and 115D

How to Calculate the Deduction under section 80G?

Step 1: Compute your total income

Compute your total income before claiming any deductions under Chapter VI-A (including 80G).

Step 2: Calculate Adjusted Total Income

• Subtract all deductions except Section 80G from the Gross Total Income.
• Also, exclude Long-term capital gains, Short-term capital gains under Section 111A, Income under Sections 115A, 115AB, 115AC, and 115AD, All incomes covered under Chapter VI-A, except 80G

The resulting figure is called the Adjusted Total Income.

Step 3: Calculate Qualifying Limit

Calculate 10% of Adjusted Total Income. This is known as the Qualifying Limit. It applies to donations subject to a limit.

Step 4: Categorise Donations

Categorise Donations into the following categories:

• 100% deduction without limit (a)
• 50% deduction without limit (b)
• 100% deduction subject to qualifying limit (c)
• 50% deduction subject to the qualifying limit (d)

Step 5: Allow full deduction

Allow full deduction for donations in categories (a) and (b).

Step 6: Apply Qualifying Limit to Remaining Donations

For donations in categories (c) and (d):

• Total donations eligible under the qualifying limit = the lower of actual donations or 10% of adjusted total income
• Set off donations under 100% (qualifying limit) first
• Any balance remaining is considered for 50% (qualifying limit) deduction
• Deduction for 50% donations = 50% of the remaining eligible donation

Step 7: Compute Total Deduction under Section 80G

Compute Total Deduction under Section 80G by adding:

• Full deductions (from step 5)
• Deductions under the qualifying limit (from step 6)

How does Deduction Under Section 80G Benefit Different Types of Taxpayers?

The tax benefit will depend on the tax rate applicable to the taxpayer.

For example, Mr S is an individual and M/s. P Pvt. Ltd., a company, gives Rs 1,60,000 to an NGO. The total income for the AY 2025-26 of both Mr. S and M/s. P. Pvt. Ltd. is Rs 7,00,000. The tax benefit would be as shown in the table:

Particulars	Mr X	M/S. P Pvt. Ltd.
Income for the financial year 2024-25	7,00,000	7,00,000
A. Donation made to NGO	1,60,000	1,60,000
Adjusted Total Income	7,00,000	7,00,000
B. Qualifying limit (10% of the Adjusted Total Income)	70,000	70,000
Maximum permissible deduction (Minimum of A and B)	70,000	70,000
C. 50% of the maximum permissible amount	35,000	35,000
D. 50% of the donation	80,000	80,000
Deduction available under section 80G (Lower of C and D)	35,000	35,000
Taxable income after deduction (Lowe of A and B)	6,65,000	6,65,000
A. Tax payable after considering a donation	47,320	2,07,480
- Mr S tax calculated as per income tax slab rate
- M/s. P Pvt Ltd. tax calculated at 30%
B. Tax payable before donation	54,600	2,18,400
C. Tax Benefit from Section 80G deduction	7,280	10,920

Note: The above computation is done on the basis of slab rates applicable to the old tax regime, since the assessee gets the benefit of deduction only if he opts to pay tax under the old tax regime.

Details and Documents Required to Claim Deduction under Section 80G

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 - the breakup of contribution in cash and another mode
• The amount eligible for deduction

Taxpayers who want to claim tax deduction under Section 80G must have the following documents to support their claim:

• Duly stamped receipt: Obtaining a receipt issued by the charity/trust to which you donate the amount is mandatory. The receipt should include details such as your name, address, amount donated, PAN number of the trust, etc.
• Registration number of trust: All eligible trusts under this section are provided with a registration number by the Income Tax Department. Donors should ensure that the receipt contains the trust registration number.