Donations Eligible Under Section 80G and 80GGA

Giving to those in need is a powerful way to make a positive impact—but did you know it can also help you save money on taxes? In India, the Income Tax Act encourages charitable donations by offering tax deductions under Section 80G and Section 80GGA. These provisions are designed to support social causes, scientific research, and rural development while rewarding the donor.

These provisions make it possible for individuals and businesses to support social and national development efforts while reducing their taxable income. However, to avail the benefits, it’s important to understand the eligibility criteria, percentage of deductions, and documentation required. Not all donations qualify, and some are only partially deductible.

Eligibility to Claim Deduction Under Section 80G

The following categories of taxpayers are eligible to claim deductions under Section 80G of the Income Tax Act: 

• Individuals

• Companies

• Firms

• Hindu Undivided Families (HUFs)

• Non-Resident Indians (NRIs)

• Any other person 

However, it’s important to note that not all donations are eligible for deduction under this section. Only those contributions made to specified and approved funds or institutions are considered valid for claiming tax benefits.

Important Note:

Taxpayers who opt for the new tax regime under Section 115BAC are not eligible to claim a deduction under Section 80G.

Proper documentation and adherence to payment methods are essential for ensuring that the deduction claim is accepted during tax filing.

What is the Mode of Payment Under Section 80G?

To be eligible for tax deductions under Section 80G of the Income Tax Act, donations must be made through specific modes of payment. The accepted payment methods are: 

• Cheque

• Demand Draft

• Cash (only if the donation amount is Rs.2,000 or less) 

Important Conditions: 

• In-kind donations (such as food, clothing, medicines, or materials) are not eligible for deduction under this section.

• If the cash donation exceeds Rs.2,000, it does not qualify for tax deduction. Amounts above this limit must be paid through banking or digital channels like cheque, draft, UPI, or net banking. 

Moreover, the deduction percentage—either 50% or 100%, with or without qualifying limits—depends on the nature of the fund or institution receiving the donation.

How to Claim the Deduction Under Section 80G?

Claiming a deduction under Section 80G is a straightforward process, provided you follow the necessary steps and maintain proper documentation. Here's how to do it: 

• Collect a Valid Donation Receipt

  Ensure the receipt includes:

• Name and address of the charitable institution

• PAN of the trust/organization

• Registration number under Section 80G

• Donation amount and mode of payment

• Name of the donor

• Verify Section 80G Registration

  Confirm that the organization is registered under Section 80G and holds a valid approval certificate.

• File Income Tax Return (ITR)

• Declare the donation details while filing your income tax return.

• Enter the eligible deduction amount under the “Deductions under Chapter VI-A” section.

• Keep Supporting Documents

  Maintain all receipts and acknowledgments in case the Income Tax Department requests verification. 

Remember: Deductions are only available if donations are made via valid payment modes (non-cash for amounts above Rs.2,000).

List of Donations Eligible for 100% Deduction Without Qualifying Limit

The following donations are eligible for a 100% tax deduction under Section 80G, with no qualifying limit on the donation amount: 

• Chief Minister’s or Lieutenant Governor’s Relief Fund (for any State/Union Territory)

• Armed Forces Welfare Funds (Army, Navy, Air Force Central Welfare Funds)

• Andhra Pradesh CM’s Cyclone Relief Fund (1996)

• Maharashtra CM’s Relief Fund (Oct 1–6, 1993)

• CM’s Earthquake Relief Fund, Maharashtra

• Relief Funds for Gujarat Earthquake Victims (State fund and Section 80G(5C) trusts – Jan 26 to Sep 30, 2001)

• Prime Minister’s Armenia Earthquake Relief Fund

• Africa (Public Contributions – India) Fund

• Swachh Bharat Kosh (from FY 2014–15)

• Clean Ganga Fund (from FY 2014–15)

• National Fund for Control of Drug Abuse (from FY 2015–16)

• National Defence Fund (set up by the Central Government)

• Prime Minister’s National Relief Fund

• National Foundation for Communal Harmony

• Approved universities or educational institutions of national eminence

• Zila Saksharta Samiti (under the chairmanship of the District Collector)

• Funds set up by state governments for medical relief to the poor

• National Illness Assistance Fund

• National/State Blood Transfusion Councils

• National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation & Multiple Disabilities

• National Sports Fund

• National Cultural Fund

• Fund for Technology Development and Application

• National Children’s Fund 

Note: To claim the deduction, ensure the donation is made via accepted payment modes and the institution is registered under Section 80G.

List of Donations Eligible for 50% Deduction Without Qualifying Limit

The following donations qualify for a 50% tax deduction, with no upper cap or qualifying limit on the donation amount: 

• Jawaharlal Nehru Memorial Fund

• Prime Minister’s Drought Relief Fund

• Indira Gandhi Memorial Trust

• Rajiv Gandhi Foundation 

Note: Even though these contributions allow a 50% deduction, the full donated amount is still considered without any percentage-based cap on your gross total income.

Ensure that: 

• Donations are made through valid non-cash payment modes (if exceeding Rs.2,000).

• You retain proper receipts from the respective fund or institution.

• The receiving institution holds valid registration under Section 80G. 

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

These donations qualify for a 100% deduction, but only up to 10% of the adjusted gross total income of the taxpayer. Any amount donated beyond this limit cannot be claimed for deduction. 

• Donations to Government or any approved local authority, institution, or association made for promoting family planning. 

Adjusted Gross Total Income = Gross Total Income (before deductions under Section 80C to 80U) minus: 

• All exempt incomes

• Long-term capital gains

• Short-term capital gains under Section 111A

• Deductions under Sections 80C to 80U (except 80G)

• Income on which income tax is not payable 

Important: If the donation exceeds 10% of the adjusted gross total income, the excess amount will not be considered for deduction.

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

The following donations qualify for a 50% tax deduction, but the deduction amount is limited to 10% of the taxpayer’s adjusted gross total income. Donations exceeding this threshold are not eligible for deduction. 

• Donations to any other fund or institution which satisfies the conditions mentioned in Section 80G (5), but is not listed under the other three categories (i.e., not specifically eligible for 100% or without limit).

• Donations to any local authority, to be used for any charitable purpose excluding family planning.

• Donations to institutions or associations, conducting programs for charitable purposes such as education, medical relief, or welfare of the poor. 

Remember: Adjusted Gross Total Income excludes exempt incomes, capital gains, and deductions under Sections 80C to 80U (except 80G).

What is Adjusted Total Income?

Adjusted Total Income refers to the amount of income that is considered for calculating the maximum limit of deduction under certain categories of Section 80G, particularly where the deduction is subject to 10% of adjusted total income.

It is not the same as gross total income and is computed after making specific exclusions.

Adjusted Total Income is calculated as follows:

Adjusted Total Income =

Gross Total Income 

• Exempt incomes (like agriculture income)

• Long-term capital gains (LTCG)

• Short-term capital gains covered under Section 111A

• Deductions under Sections 80C to 80U (except 80G)

• Income on which tax is not payable under the Income Tax Act 

This adjusted figure ensures that the deduction under Section 80G (with qualifying limits) does not disproportionately reduce the taxable income, and is calculated on a fair and justifiable base.

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

The actual tax benefit from donations under Section 80G depends on the applicable tax rate of the taxpayer. Below is an illustration comparing an individual and a company making the same donation, under the old tax regime.

Illustrative Comparison: Mr. S (Individual) vs M/s. P Pvt. Ltd. (Company) 

Note: 

• Calculation is based on old tax regime slab rates.

• Section 80G benefits are not available under the new tax regime (Section 115BAC). 

Documents Required to Claim a Tax Deduction on Donations

To successfully claim a tax deduction under Section 80G, it’s essential to maintain proper documentation as proof of your donation. Here's a list of documents you must have:

1. Donation Receipt 

The most important document issued by the trust or institution. It must include: 

• Name, address, and PAN of the trust/organization

• Registration number under Section 80G (with validity period)

• Name of the donor

• Amount donated (both in figures and words)

• Mode of payment

2. Form 58 (if applicable)

• Required when claiming 100% deduction with qualifying limit for donations made to institutions involved in approved projects or schemes.

3. Proof of Payment

• Bank statements, cheque copy, or payment receipts as evidence that the donation was made through an eligible mode (non-cash for amounts above Rs.2,000). 

Tip: Keep these documents safely for future reference or if demanded during tax assessment.

Section 80GGA

Section 80GGA of the Income Tax Act provides tax deductions for donations made towards scientific research or rural development. This benefit is available to all taxpayers except those with income from business or profession. The entire donation amount is eligible for a 100% deduction, provided the contribution is made to approved institutions or organizations specified under this section. Payments must be made in non-cash modes if the donation exceeds Rs.2,000. Proper receipts and documentation are essential to claim this deduction. Section 80GGA encourages taxpayers to support innovation and development in underprivileged and rural sectors of India.

List of Donations Eligible Under Section 80GGA

Under Section 80GGA, 100% deduction is available on donations made for scientific research and rural development, provided they are made to the following approved entities:

1. Scientific Research

• Approved research association for scientific research.

• University, college, or other institution approved for scientific research by the prescribed authority.

2. Rural Development

• Association or institution approved for carrying out any program of rural development.

• Rural development fund set up and notified by the Central Government.

• National Urban Poverty Eradication Fund, established and notified by the Central Government.

• Public sector companies or local authorities engaged in rural development or approved urban poverty alleviation schemes.

• Institutions or associations engaged in training persons for implementing rural development programs. 

Note: Donations exceeding Rs.2,000 must be made through non-cash modes to be eligible for deduction.

Conclusion

Charity begins at home—but its benefits can go much further when supported by thoughtful tax planning. Sections 80G and 80GGA of the Indian Income Tax Act offer a valuable opportunity for taxpayers to support causes that matter, while also enjoying reductions in their taxable income.

Whether you're donating to help the underprivileged, support scientific research, or contribute to rural development, understanding the rules and eligibility criteria is key to making the most of these provisions. With options for 100% or 50% deductions, and donations supported through various approved funds and institutions, every contribution—big or small—can make a meaningful difference.

By choosing to give back through approved channels and keeping the required documentation in order, you’re not just contributing to society—you’re also managing your finances wisely. Donations under Section 80G and 80GGA truly allow you to do well while doing good.

If you have any queries regarding Section 80G and 80GGA, then you can connect with Compliance Calendar LLP experts through email info@ccoffice.in or Call/Whatsapp at +91 9988424211.

FAQs

Q1. What is Section 80G and 80GGA?

Ans. Section 80G offers tax deductions for donations to charitable institutions. Section 80GGA allows deductions for contributions to scientific research and rural development (non-business income only).

Q2. What type of donation is eligible for 80G?

Ans. Donations made in monetary form (cheque, draft, digital modes) to approved charitable institutions or funds are eligible. In-kind donations like food or clothes are not eligible.

Q3. Who is eligible for 80GG deduction?

Ans. Section 80GG provides deductions to individuals who do not receive HRA and pay rent for residential accommodation. They must be self-employed or salaried and not own a house.

Q4. Who can apply for 80G?

Ans. Individuals, HUFs, companies, firms, NRIs, and other taxpayers can claim deductions under Section 80G, provided donations are made to approved institutions and they opt for the old tax regime.

Q5. What proof is required for 80G?

Ans. To claim 80G deduction, you need a donation receipt with the institution's name, PAN, 80G registration number, amount donated, payment mode, and your name. Proof of payment is also required.