Section 80G offers a tax deduction for donations to certain prescribed funds and charitable institutions. Here are the details of the section.
New change in Budget 2012-Any payment exceeding Rs 10,000/- shall only be allowed as deduction under section 80G and 80GGA if such amount is paid by any other mode than cash . This change is appplicable from financial year 2012-2013.
This section is applicable to all assessees, who make an eligible donation, whether an individual, HUF, NRI or a company.
The extent of deduction is either 50% or 100% of the contribution, depending on the charitable institution donated to.
For certain funds, the aggregate deduction is limited to 10% of the “Adjusted Gross Total Income”. So, in such cases, even if you do make a donation larger than 10% of your Adjusted Gross Total Income, the donation amount eligible for claiming a deduction would be capped at 10% of the Adjusted Gross Total Income.
The Adjusted Gross Total in this case, is the gross total income minus long-term capital gain, short term capital gain and all deductions u/s 80CCC to 80U except any deduction under this section.
Scope of Deduction
- The donation may be paid either out of taxable or exempted income.
- Only donations made in cash or cheque are eligible for deductions. Donations made in kind, in the form of food, clothing, medicines etc are not eligible.
- Donations to foreign charitable trusts or to political parties are not eligible for any deduction.
- For donations made to Indian Olympic Association, any association notified u/s 10(23) for development of infrastructure for sports or games, or for sponsorship of sports or games, only a company is eligible for deduction.
- Donations made to not all charitable institutions qualify for a deduction. Here is a list of approved charitable institutions and funds that qualify for a deduction.
Donations with 100% deduction without any qualifying limit:
- Prime Minister’s National Relief Fund
- National Defence Fund
- Prime Minister’s Armenia Earthquake Relief Fund
- The Africa (Public Contribution – India) Fund
- The National Foundation for Communal Harmony
- Approved university or educational institution of national eminence
- The Chief Minister’s Earthquake Relief Fund, Maharashtra
- Donations made to Zila Saksharta Samitis.
- The National Blood Transfusion Council or a State Blood Transfusion Council.
- The Army Central Welfare Fund or the Indian Naval Benevolent Fund or The Air Force Central Welfare Fund.
Donations with 50% deduction without any qualifying limit.
- Jawaharlal Nehru Memorial Fund
- Prime Minister’s Drought Relief Fund
- National Children’s Fund
- Indira Gandhi Memorial Trust
- The Rajiv Gandhi Foundation
Donations to the following are eligible for 100% deduction subject to 10% of adjusted gross total income
- Donations to the Government or a local authority for the purpose of promoting family planning.
- Sums paid by a company to Indian Olympic Association
Donations to the following are eligible for 50% deduction subject to 10% of adjusted gross total income
- Donation to the Government or any local authority to be utilized by them for any charitable purposes other than the purpose of promoting family planning.