Income Tax Act: Under Section 80G Deduction Eligibility and Details

Donations to charities are one of the most effective ways for us to save cash on taxes while also helping the world, which will then qualify for Section 80G deductions. Trusts or institutions must be eligible, and the list is provided in the article you can go through.

Section 80G in 1961 of the Income Tax Act is mostly about charitable donations, with the goal of giving tax breaks to people who do charitable things.

This section provides tax breaks for donations to specific funds or charities. An amount donated to an eligible charity by an individual may be claimed as a tax deduction when filing an income tax return.

What Is the Income Tax Act of the Section 80G

Section 80G of the IT Act 1961 allows any individuals to claim a tax deduction for charitable donations or to make contributions made during the fiscal year when they file their ITR.

This Section act helps result in a reduction in tax liabilities as the individual falls into a lower tax bracket. One of the best aspects of this Section 80G is that there is no maximum limit on the amount of tax-deductible donations for a specified number of charities when filing an ITR.

Eligibility Criteria for Section 80G Tax Deductions

To claim tax deductions of the IT Act under Section 80G, you must meet the following eligibility criteria:

  1. You must be an individual or a HUF.
  2. Non-residents of India who contribute to eligible trusts can also claim deductions.
  3. You must provide relevant proof of your donations.
  4. The donation must be made from your taxable income. Donations made from non-taxable income are not eligible for deductions.

Documents Required for Section 80G Deduction Claim

To claim deduction under Section 80G, individuals must have the following documents:

  1. Duly stamped receipt: A receipt issued by the trust/charity receiving the donation must include details such as the name, address, and PAN number of the trust, the amount donated, and the name of the donor.
  2. Form 58: This form is essential if the donor intends to claim a 100% deduction on a donation.
  3. Registration number of the trust: The receipt with the registration number provided by the Income Tax Dept to the eligible trust. Registration no. must be valid on the date of donation to claim deductions.

The process to Claim Tax Deduction

  • Name of the charitable organization you donated to
  • PAN (Permanent Account Number) of the charitable organization
  • Address of the charitable organization
  • The amount that you have claimed as a deduction
  • The amount that you have donated to the charitable organization

Deduction Conditions Under Section 80G

Donations made to eligible trusts/charities that qualify for tax deductions are subject to specific conditions. Donations under Section 80G fall under four categories as listed below:

  1. Donations with 100% Deduction (No qualifying limit): Donations made to National Defense Fund, Prime Minister’s National Relief Fund, NFCH, National/State Blood Transfusion Council, and similar organizations are eligible for 100% tax deduction without any qualifying limit.
  2. Donations with 50% Deduction (without any qualifying limit): Donations made to trusts such as Prime Minister’s Drought Relief Fund, National Children’s Fund, Indira Gandhi Memorial Fund, and similar organizations are eligible for 50% tax deduction without any qualifying limit.
  3. Donations with 100% deduction (subject to 10% of adjusted gross total income): Donations made to local authorities or government for family planning or Indian Olympic Association qualify for deductions under this category. In such cases, only 10% of the donor’s Adjusted Gross Total Income is eligible for deductions. Donations that exceed this limit are rounded off to 10%.
  4. Donations with 50% deduction (subject to 10% of adjusted gross total income): Donations made to any local authority or government for charitable purposes qualify for deductions under this category. In such cases, only 10% of the donor’s Adjusted Gross Total Income is eligible for deductions. Donations exceeding this limit are capped at 10%.

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 Tax Deductions Eligible for Given List of Donations

  • Prime Minister’s National Relief Fund
  • National Illness Assistance Fund
  • National Sports Fund
  • National Trust for Welfare of Persons with Mental Retardation, Autism, , Cerebral Palsy, and Multiple Disabilities
  • National Foundation for Communal Harmony
  • Approved universities/educational institutions of national eminence
  • The Indian Naval Benevolent Fund, Air Force Central Welfare Fund or Army Central Welfare Fund
  • Cyclone Relief Fund of the Chief Minister of Andhra Pradesh in 1996
  • Africa (Public Contributions-India) Fund
  • Trusts, funds, or institutions providing earthquake relief in Gujarat between January 16 and September 30, 2001, and covered under Section 80G(5C)
  • Maharashtra Chief Minister’s Relief Fund during October 1-6, 1993
  • Chief Minister’s Earthquake Relief Fund, Maharashtra
  • Swachh Bharat Kosh, effective from the financial year 2014-15
  • Fund for Technology Development and Application
  • Funds set up by the State Government of Gujarat for earthquake relief in the state
  • National Children’s Fund

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