Introduction to Section 80G

The Income Tax Act's Section 80G lets taxpayers claim a tax deduction for donations to qualified charity organizations. This aids in lowering the taxable income, thereby lowering the total tax load. The kind of contribution and the company getting it determine the 80G deduction limit. While some gifts let just 50% deduction, others qualify for a 100% deduction.

Deductions under Section 80G are not accessible under the new tax system. Under the previous tax system, nevertheless, people and companies may claim these deductions if they give non-cash. Donations of cash more than ₹2,000 are not eligible for tax exemptions. Make sure the NGO or trust you are claiming the 80G deduction has a current 80G certificate.

Eligibility Criteria for 80G Deductions

The Income Tax Act 1961 enables taxpayers to get tax benefits through its section 80G when they donate to approved charitable organizations. Through this provision donors gain tax advantages by making donations to social causes. The Income Tax Act does not provide tax deductions for all types of donations under Section 80G. An individual can receive this benefit only when certain rules and conditions are fulfilled.

Who Can Claim 80G Deduction?

The 80G deduction is available to the following taxpayers:

• Individuals (both salaried and self-employed professionals)
  
  
• Hindu Undivided Families (HUFs)
  
  
• Companies, firms, and business organizations
  
  
• NRIs (if donating to a qualified Indian charity)

Taxpayers with taxable income must file their ITR with valid donation receipts from a recognized organization to claim an 80G deduction.

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How to Calculate Deduction Under 80G

The Income Tax Act, 1961's 80G deduction covers donations to approved charities. The type of gift and 80G deduction limit determine the deduction calculation.

Step 1: Identify the Type of Donation

The government has classified donations into four categories under Sec 80G of Income Tax Act:

1. 100% Deduction Without Limit - Donations to government funds such as the PM CARES Fund and the National Defence Fund qualify for a full deduction under 80G with no upper limit.
   
   
2. 50% Deduction Without Limit - The Jawaharlal Nehru Memorial Fund can receive a 50% deduction under 80G without a limit.
   
   
3. 100% Deduction  -Some gifts are fully deductible up to 10% of adjusted gross income.
    
4. 50% Deduction - Some selected funds allow just 50% deduction, subject to 10% of the donor's adjusted gross income.

Step 2: Calculate Adjusted Gross Income

Calculate AGI using this formula to get Section 80G's maximum deduction:

Adjusted Gross Income = Gross Income - Exempt Income - Long-Term Capital Gains - Other Deductions

Only 10% of adjusted income can be deducted for 10% limit contributions.

Step 3: Apply the Deduction Percentage

Once the 80G deduction list category is identified, apply the respective deduction percentage (100% or 50%) to the donation amount.

Example of 80G Deduction Calculation

Assuming a taxpayer with ₹10,00,000 AGI pays ₹1,50,000 to an eligible charity, a 50% deduction is available up to 10% of AGI:

• Maximum eligible a donation deduction: 10% of AGI = ₹1,00,000.
  
  
• Final deduction: 50% of ₹1,000,000 = ₹50,000

80G Deduction in New Tax Regime

Under the new tax regime, taxpayers cannot claim any deduction under 80G. The benefit is only available under the old tax regime.

Maintaining correct documentation and understanding 80G certificates promotes simple tax filing and compliance with 80G income tax requirements.

What is 80G Certificate?

To claim an NGO donation tax exemption, donors must verify the organization's 80G certificate. This certificate proves the charity's 80G income tax deduction eligibility.

What is the Mode of Payment Under Section 80G?

The taxpayer needs to use approved payment methods when making donations to qualify for Section 80G deductions. According to Sec 80G of the Income Tax Act only specific payment methods can qualify for tax deductions. The rules regarding acceptable payment methods for tax deductions under 80G need full comprehension to qualify for deduction calculations.

Accepted Modes of Payment for 80G Deduction

The government allows the following payment methods for claiming the deduction under 80G:

• Cheque or Demand Draft - Donations made through a cheque or demand draft are eligible for the NGO donation tax exemption.
  
  
• Online Bank Transfers - Payments made via NEFT, RTGS, UPI, credit/debit cards, or net banking qualify for 80G income tax deductions.
  
  
• Digital Payment Platforms - Contributions via mobile wallets and other authorized digital methods are accepted under the 80G deduction list.

Restricted Payment Modes Under 80G

• Cash Donations beyond ₹2,000 - The 80G deduction limit prohibits tax exemption for gifts beyond ₹2,000. Only digital or bank transactions are permitted for larger contributions.
  

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How to Claim the Deduction Under Section 80G?

Taxpayers must provide specified facts on their income tax return to receive the 80G deduction. The deduction under Section 80G of the Income Tax Act applies to donations to qualifying charities.

Details Required to Claim the Deduction

When filing ITR, provide these details:

When submitting the Income Tax Return (ITR), the accompanying information must be supplied:

• Name of the Donee - The entity receiving the contribution.
  
  
• PAN of the Donee - A valid PAN number of the recipient organization is mandatory.
  
  
• Address of the Donee - The complete address of the charitable trust or fund.
  
  
• Amount of Contribution - A clear breakup of the donation amount made through cash or another mode.
  
  
• Eligible Deduction Amount  - The part of the donation fit for the 80G deduction list.  

List of Donations Eligible for 100% Deduction Without Qualifying Limit

Specific donations may be fully deductible under Section 80G of the Income Tax Act without restrictions. Donors may deduct the entirety of their contributions from their taxable income without restrictions. Such donations primarily support national welfare and emergency relief initiatives.

What is 100% Deduction Without Qualifying Limit?

Donations to government-recognized funds under Section 80G are fully tax-deductible.

List of Donations Eligible for 100% Deduction Without Limit

The 80G deduction list includes the following funds and institutions:

Central Government Funds

• National Defence Fund - Supports the Indian Armed Forces.
  
  
• Prime Minister's National Relief Fund (PMNRF) - Used for disaster assistance, medical help, and rehabilitation.
  
  
• National Foundation for Communal Harmony - Promotes peace and harmony.
  
  
• PM CARES Fund - Established for emergency disaster response and relief efforts.

Educational and Welfare Institutions

• Any University or Institution of National Eminence - Approved by the government.
  
  
• Zila Saksharta Samiti - Works on district-level literacy programs.
  
  
• National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation, and Multiple Disabilities - Provides support to individuals with exceptional needs.

Healthcare and Relief Funds

• National Illness Assistance Fund - Provides financial assistance for medical treatment of poor patients.
  
  
• National Blood Transfusion Council & State Blood Transfusion Councils - Support blood donation and transfusion services.
  
  
• Fund set up by a State Government for medical relief to the poor.

State and Disaster Relief Funds

• Chief Minister's Relief Fund or Lieutenant Governor's Relief Fund - Supports disaster relief efforts in states and union territories.
  
  
• The Army Central Welfare Fund, Indian Naval Benevolent Fund, Air Force Central Welfare Fund.
  
  
• Maharashtra Chief Minister's Relief Fund (October 1, 1993 - October 6, 1993).
• Chief Minister's Earthquake Relief Fund, Maharashtra.
  
  
• State Government Relief Funds for Gujarat Earthquake Victims.

Environment and Social Welfare Funds

• Swachh Bharat Kosh - Supports sanitation and cleanliness initiatives in India.
• Clean Ganga Fund - Helps in the conservation and cleaning of the Ganga River.
• National Fund for Control of Drug Abuse - Works towards drug prevention and rehabilitation.  
  
  

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List of Donations Eligible for 50% Deduction Without Qualifying Limit

Under Sec 80G of the Income Tax Act, some contributions are qualified for a 50% deduction without restrictions. This lets the tax payer deduct half of the donation from their taxable income.

What is 50% Deduction Without Qualifying Limit?

Section 80G allows half of donations to government-recognized organizations and funds to be deducted from taxable income. This benefit has no maximum claim amount.

List of Donations Eligible for 50% Deduction Without Limit

The following donations qualify for 50% deduction under 80G:

1. Government-Approved Funds

• Jawaharlal Nehru Memorial Fund - Promotes education and social welfare.
  
  
• The Indira Gandhi Memorial Trust funds education, healthcare, and social development programs.
  
  
• The Rajiv Gandhi Foundation focuses on education, rural development, and social empowerment.

2. Social and Educational Welfare Organizations

• Any fund established by the government for promoting education and public health - Includes government-backed institutions working for literacy and healthcare improvements.

80G Deduction Limit and Tax Benefits

• 50% of the donation amount is deductible from taxable income under 80G deduction calculation.
  
  
• There is no upper limit based on the adjusted gross total income, making these donations more flexible for tax savings.
  
  
• Donations exceeding ₹2,000 must be made through cheque, demand draft, or digital payment to qualify.

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

Under Sec 80G of the Income Tax Act, some gifts are 100% deductible up to 10% of adjusted gross total income. Section 80G does not allow deductions for donations beyond this maximum.

Eligible Donations

• Donations to government or local authorities for promoting family planning.
  
  
• Contributions to Indian Olympic Association or sports organizations approved by the government.

80G Deduction Calculation & Tax Benefits

• 100% deduction allowed but capped at 10% of adjusted gross total income.
  
  
• Not available under 80G deduction in new tax regime.
  
  
• Valid 80G certificate and payment through bank or digital mode are mandatory for claiming the NGO donation tax exemption.

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

The Income Tax Act's Section 80G allows 50% deductions for specified donations up to 10% of adjusted gross income. The 80G deduction restricts claims over this threshold.

Eligible Donations

• Donations to government or local authorities for charitable purposes (excluding family planning).
  
  
• Contributions to approved NGOs working for social welfare under the 80G deduction list.

80G Deduction Limit & Tax Benefits

• 50% deduction allowed but capped at 10% of adjusted gross total income.
  
  
• Not applicable under 80G deduction in new tax regime.
  
  
• A valid 80G certificate and digital payment are necessary for claiming the NGO donation tax exemption.

How Does Deduction Under Section 80G Benefit Different Types of Taxpayers? (2025-2026)

The 80G deduction under the Income Tax Act, 1961 helps various taxpayers who give to qualifying organizations. Applicability and 80G deduction limit vary by taxpayer type. In FY 2025-2026, the following table shows how taxpayers can benefit from Section 80G deductions.

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