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Make donations, save income tax – Section 80G

Are you interested in philanthropic activities? Do you donate money to charities? If yes, you could be saving income tax. You could save tax even if you contribute money for public purposes. Read on.

Income tax act encourages many good causes – like buying a house, getting higher education, supporting a disabled dependent, etc.

Another good cause that it encourages is donation to charities or donations made for public good. This is covered under section 80G of the Income Tax (IT) Act.

Let’s find out the income tax benefits that you can get for such donations.

 

The benefit available

The amount you donate to these institutions or funds are deductible from your taxable income. The extent of deduction is either 50% or 100%, depending on the institution you donate to.

The deduction is available for donations made in cash or cheque only. Donations made in kind (like giving food, clothes, blankets, medicines, etc.) are not eligible for any deduction.

 

The importance of the receipt

On making the donation, the fund or institution would provide you a stamped receipt, and this is admissible as the proof of making a donation. The fund or institution’s eligibility under section 80G should be mentioned on the receipt.

The receipt should have the following information:

  • The name and address of the trust / institution
  • The name of the donor – that would be you!
  • The amount donated – this amount should be mentioned in words and figures, and both should match!
  • The registration number issued to the trust / institution by the income tax department under section 80G
  • The validity period of the registration – please ensure that the registration is valid on the date on which you make the donation

To be extra cautious, you can also ask for a photocopy of the 80G certificate issued to the trust / institution by the income tax department.

 

Limit for deductible donation

In case of certain funds or institutions, donations above 10% of your Adjusted Gross Total Income (GTI) are allowed for deduction only upto 10% of your adjusted GTI. Thus, even if you make a donation larger than 10% of your adjusted GTI, the donation eligible for deduction would be capped at 10% of your adjusted GTI. (Read on for an example)

Please note that this “10% of adjusted GTI” limit is applicable for the sum of all donations made by you, and not on each individual donation separately.

 

Calculation of Adjusted Gross Total Income

Adjusted Gross Total Income =
Gross Total Income
Less Long-term capital gains, if any, which have been included in the GTI
Less All deductions permissible under section 80C to 80U (except for deductions under section 80G)
Less Any income on which income tax is not payable (for example, agricultural income)
Less Certain incomes of NRIs (as per Section 115)

 

List of eligible funds and institutions (indicative only)

The deduction is not allowed for donations made to all charitable institutions – it is only admissible for certain approved or specified funds and institutions.

The entities allowed for sec 80G deduction are:

Particulars Amount of deduction allowed (as a % of the contribution) Whether restricted to 10% of Gross Total Income (GTI)
National Defense Fund 50 No
Jawaharlal Nehru Memorial Fund 50 No
Prime Minister’s Drought Relief Fund 50 No
Prime Minister’s National Relief Fund 100 No
Prime Minister’s Armenia Earthquake Relief Fund 100 No
Africa (Public Contributions-India) Fund 100 No
National Children’s Fund 100 No
Indira Gandhi Memorial Trust 50 No
Rajiv Gandhi Foundation 50 No
National Foundation for Communal Harmony 100 No
Approved university / educational institution 100 No
Maharashtra Chief Minister’s Earthquake Relief Fund 100 No
Zila Saksharta Samiti 100 No
National Blood Transfusion Council 100 No
Medical Relief Funds of a state government 100 No
Army Central Welfare Fund, Indian Naval Benefit Fund, Air Force Central Welfare Fund 100 No
Andhra Pradesh Chief Minister’s Cyclone Relied Fund 100 No
National Illness Assistance Fund 100 No
Chief Minister’s or Lt. Governor’s Relief Fund (Some conditions apply) 100 No
National Sports Fund 100 No
National Cultural Fund 100 No
Fund for Technology Development and Application set up by the Central Government 100 No
National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities 100 No
Any other approved fund or institution 50 Yes
Donations to government / local authority for charitable purposes (excluding family planning) 50 Yes
Government / local authority / institution / association towards promoting family planning 100 Yes

Eligibility for donation

Any individual or Hindu Undivided Family (HUF) can claim this deduction under section 80G. Even non resident Indians (NRIs) can claim this benefit.

Example 1

Let’s say you have an income of Rs. 7 Lakhs in a year. You have fully utilized Section 80C benefits, and have invested Rs. 1 Lakh towards it.

You also make a donation of Rs. 1.5 Lakhs to a charitable institution having an 80G certificate from the income tax department.

Let’s see how much you can claim u/s 80G.

Since you have made the donation to a private trust, the allowable deduction is 50% of the amount donated, subject to an upper limit of 10% of the adjusted GTI.

Qualifying amount for 80G deduction is lower of donation amount (i) and 10% of adjusted GTI (ii)

(i) Donation amount: Rs. 1.5 Lakhs.

Gross Total Income (GTI) = Rs. 7,00,000

Adjusted GTI = Rs. 7,00,000 – Rs. 1,00,000 = Rs. 6,00,000

Therefore,

(ii) 10% of Adjusted GTI = Rs. 60,000

Thus, qualifying amount = Rs. 60,000.

Deduction available as per section 80G is 50%.

Thus, amount eligible to be claimed as deduction under section 80G is:

50% of qualifying amount = 50% of Rs. 60,000 = Rs. 30,000

Thus, in this case, you would be able to claim Rs. 30,000 as deduction under section 80G.

Example 2

Again, let’s say you have an income of Rs. 7 Lakhs in a year. You have fully utilized Section 80C benefits, and have invested Rs. 1 Lakh towards it.

You also make a donation of Rs. 75,000 to Prime Minister’s National Relief Fund.

Let’s see how much you can claim u/s 80G.

Since you have made the donation to the Prime Minister’s National Relief Fund, the allowable deduction is 100% of the amount donated, with no ceiling on the deduction.

Your Gross Total Income (GTI) = Rs. 7,00,000.

Adjusted GTI = Rs. 7,00,000 – Rs. 1,00,000 (claimed as deduction u/s 80C) = Rs. 6,00,000.

The deduction allowed u/s 80G would be:

100% of donation made = Rs. 75,000

Please note that in this case, you would be able to claim the full contribution of Rs. 75,000 as deduction under section 80G even when the 10% of adjusted GTI is Rs. 60,000 – because for claiming deduction for donations made to the Prime Minister’s National Relief Fund, there is no cap on the amount of deduction!

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Comments

  1. My friend’s son, aged 3 years is suffering from TALASSEMIA MAJOR and he need his blood transfused for every month which costs him Rs.1500/- per month.

    An operation for permanent cure could cost Rs.20 lakhs. He needs donations for that. I thought people will give more donations if they get some Income Tax exemption or deduction for their donations.

    Can he get registered to give exemption certificates under Section 80G with Income Tax authorities? If not please suggest any other provision so that the donations if any he will receive will get some tax relief for the donors.

    Yours truly, Srinivas

  2. Hi Srinivas,

    I do not believe individuals can get certified to qualify u/s 80G. It is usually institutions and trusts that get this certificate.

    Your friend can set up a trust with the sole beneficiary being his son, and can apply for this certification for the trust. However, there are restrictions on who gets this benefit, so I am not sure if this would work out. Also, strict accounts would need to be maintained for the trust.

    However, your friend can claim deduction of his current expenses (Rs. 1,500 per month) from his income – this would be as per section 80DDB of the income tax act.

    I would be writing in detail about it soon – thanks for suggesting a good topic!

  3. Anonymous says:

    Hi Anil,

    I am sorry, but I am not the right person to guide you about this – I do not have enough knowledge about this.

    I believe a CA might be able to help you in this regard.

  4. What is the procedure to obtain Income-Tax Exemption Certificate 80G? How long it will take to reach in the hand? What would be the cost for getting this certificate?

    Is Chartered Accountant is able to help in this regard? To set a Public Trust, to whom should apply – Charity Commissioner or Income-Tax Commissioner?

    The charity work would be basically to provide free food and cloths to poor people in remote area.

  5. Jeffrey Samuel says:

    I would like to donate to Chief Minister’s Relief Fund Maharashtra. What documents, receipts will be received by me from them? Is it compulsory to have the receipt endorsed with round stamp? Do I have to produce exemption certificate every year for claiming tax benefit to my office?
    Kindly reply as I am regularly facing problem with my office IT staff.
    Thanks and best regards
    Jeffrey.

  6. Anonymous says:

    Hi Jeffrey,

    You should get a receipt for contributing the amount to the Chief Minister’s Relief Fund. I do not believe you would need anything else to claim exemption of the donated amount.

    And since you are donating to the Chief Minister’s Relief Fund, you should not be required to provide the exemption certificate every year.

  7. shrikrishna patil says:

    how much time is required wait to 80G certificate after registrering a trust?

  8. Anonymous says:

    Hi Shrikrishna,

    I do not have experience in assisting trusts in getting the 80G certificate. Therefore, I wouldn’t be able to guide you.

    Sorry!

  9. Hi Sir,
    My sisters gross salary is Rs.395700
    She invested Rs.26000 in LIC,Rs.30000 in mutual fund,Rs.27000 in PF…
    And she donated Rs.67000 for one Trust.
    (qualify deduction U/S 80G of I.T Act,1961 vide order No.DIT(E)/MC/80G/…….) is mentioned in that recepit

    so here how much amount is eligible for deductions…..
    (26000+30000+27000)+67000
    or
    Totally 100000

    Pls reply ASAP…..

    rgds
    Ranga.

  10. Anonymous says:

    Hi Ranga,

    The limit for section 80C deduction is Rs. 1 Lakh. So, Rs.26000 in LIC + Rs.27000 in PF + Rs.30000 in mutual fund (if ELSS scheme) would be deductible u/s 80C.

    Deduction u/s 80G is separate from section 80C. So, even that would be available. The exact amount (100% or 50%) would depend on the trust’s eligibility – the % should be mentioned on the receipt.

  11. Anonymous says:

    Hi Warankk,

    Thanks a lot for pointing this out – I agree with your auditor. Please thank him on my behalf as well :-)

    The confusion arose regarding the upper limit of 10% of adjusted GTI. What is limited to 10% of adjusted GTI?

    I had considered the amount deductible for deduction u/s 80G to be capped at 10% of adjusted GTI. Whereas actually, it is the “qualifying amount” that is capped at 10% of adjusted GTI.

    Here is the same example again:

    Donation amount: Rs. 1.5 Lakhs.

    Gross Total Income (GTI) = Rs. 7,00,000.
    Adjusted GTI = Rs. 7,00,000 – Rs. 1,00,000 = Rs. 6,00,000.
    10% of Adjusted GTI = Rs. 60,000

    Qualifying amount for 80G deduction is lower of donation amount and 10% of adjusted GTI.

    Thus, qualifying amount = Rs. 60,000.

    Deduction available as per section 80G is 50%.

    Thus, you would be able to claim Rs. 30,000 as deduction under section 80G.

    Once again, thanks for pointing this out… I would also make changes to the main article so that there is no confusion.

  12. Anonymous says:

    Hi Kesavan,

    I don’t think I am the right person to answer that – I know the provisions from the employee’s point of view. I wouldn’t know the procedure / rules from an employer’s angle.

    Sorry!

  13. S. Kesavan says:

    whether 80G deductions can be adjusted in the total salary income of the employer while deducting tax at source and CA 16 can be issued incorporatilng the details of donations under80G

  14. Anonymous says:

    Dear Sir,

    According to my auditor who is practising for a long time, the 80 G calculation is different. It is 50% of the 10% of the Gross Total Income [ for donations made to private charitable trusts etc].
    In the example 1 given by you, it will be 30,000 only instead of 60,000. I quoted your calculation example 1 to him. He verified it and mentions that his calculation is correct. He also says that TAXMANN Ready Reckoner also supports his view only.

    Can you kindly advise further on this ?

    Thanks in advance for your kind reply

    Best Regards

    K Kameswaran

  15. Vivek Agrawal says:

    Dear Sir,
    I wish to make donation thru an NGO – anyone among Bharti foundation / Helpage India / CRY/ SOS/ Smile Foundation / Grameen Foundation. Could you inform on this donation to qualify for rebate u/s 80G thru which all NGOs?
    regards – Vivek

  16. Hi Vivek,

    The list of NGOs qualifying for 80G exemption is pretty long, and ever changing. So, such a list would be out of scope for this website.

    It would be appropriate to check the websites of the respective NGOs to find out their 80G exemption status.

  17. Satish Sutar says:

    Can you plz suggest me whether should i consider donation in Salary Computation i.e. in Salary TDS ? This is very urgent.

  18. Kali Charan Kumar says:

    I am a renal patient and will get some help from my relatives at states for my treatment , is that money coming to my account is taxable, please suggest.

  19. Hi Raagvamd,

    Please provide the source for the list of NGO regd under 80G.
    Say i work for an software company and most of people don’t know the benefits of donation under 80G. So, if u provide the list of 80G companies or source where we can find all the list, we’ll try to circulate the same in corporate mails.. which will be benefitting 80G instutions and employees too (being this is the best way to make info reach to all techies)…

  20. Hi Satish,

    Yes, you should.

  21. Hi Kali Charan,

    The amount you would receive would be considered as a gift. It would be taxed in your hands if it exceeds a certain amount – depending on who is giving you the amount.

    For exact details, please read Tax on gifts (Gift tax): When to pay, how much to pay

  22. Hi Rajesh,

    This is a good suggestion! The list of 80G companies is constantly evolving, but I think I should maintain it for the reason you have mentioned…

    Thanks – I would put it up soon.

  23. JYOTHI BASU says:

    Sir we are having christian organasion in vijayawada with firm regisrtation from three years.now we are want to take 80g and some related certificates.please suggest and tell me cost.

  24. Hi…
    If any body from U.s.a. or U.k. donate to a religious trust of India which is having Fcra no…. How much tax exemption donor will get…
    Can anybody give other detail on such topic also..
    Tim…

  25. Hi…
    If any body from U.s.a. or U.k. donate to a religious trust of India which is having Fcra no…. How much tax exemption donor will get…
    Can anybody give other detail on such topic also..
    Tim…

  26. Hi…
    If any body from U.s.a. or U.k. donate to a religious trust of India which is having Fcra no…. How much tax exemption donor will get…
    Can anybody give other detail on such topic also..
    Tim…

  27. 50to 100% if u want to donate please contact jobii 09480111234

  28. Hi! I found this article very informative.. thanks!

    I have a question –
    Does donations eligible for 80G excemption can also be considered as 80C investments?

    I have donated some amount say 20000/- to a private institution, I suppose I am eligible for 10000/- excemption…

    Now can this 20000 or 10000 rs be considered as investment under 80C also???

    In other words, does 80C and 80G relate with each other in any way???

    Thanks in advance…
    Nitin

  29. Anonymous says:

    If any body from U.s.a. or U.k. donate to a religious trust of India which is having Fcra no…. How much tax exemption donor will get…
    Can anybody give other detail on such topic also..
    Or From where I can find how much exemption a donor of Uk or USA will get ?
    Tim…

  30. Dear Sir,

    I asked this query some time back. Please check and revert

    My mother donated Rs.1,00,000 to a charitable institute registered under 80G with valid documentation. My mother is not an IT Assessee. I am an IT Assessee. Can I claim rebate since the donation has been made BY CASH??

    Please clarify

    Govindan

  31. govindan says:

    Dear Sir,
    My mother donated Rs.1,00,000 to a charitable institute registered under 80G with valid documentation. My mother is not an IT Assessee. I am an IT Assessee. Can I claim rebate since the donation has been made BY CASH??

    Please clarify

    Govindan

  32. Jeffrey samuel says:

    This is in continuation to my earlier mail on May 08/2009.

    I am issued a receipt with signature by the Secretary/ Office bearer of the Fund.
    On insisiting for the round stamp affix by the Fund, I was informed there is no requirement as The Fund is issuing a receipt along with letter of Thanks mentioning details on the Funds letter head and it is a Government body. Kindly advice is this acceptable. Refer below details
    quote

    The importance of the receipt

    On making the donation, the fund or institution would provide you a stamped receipt, and this is admissible as the proof of making a donation.

    Unquote.

    My office staff is not ready to accept the same and allow me IT benefit under section 80G.

    Please advice and guide how to over come such hurdles made by certain citizen.

    Jeffrey.

  33. U/s 80G deduction eligible for me if it mede by my husband and children names.

  34. P. RAJENDIRAN TAMILNADU says:

    I am the Secretary of one Voluntary Organisation in Tamilnadu. When i applied for fund to the Donor who in Chennai, he told me that those Trusts which is registered u/s IT exemption 80G V & VI or 80G, with 12AA can apply for fund. So, Any trusts is got 80G V & VI or 80G (V) Please contact me over mobile I will guide you: P. RAJENDIRAN, MOBILE: 09367528746

  35. Atit Jain (Advocate) says:

    Dear all,

    I am a member of an NGO “Mission Swasth Bharat” which is also 80G certified.
    I would like to inform here that under section 80G only 50% exemption on the amount donated is allowed. So if you donate 10,000/- for e.g. you get a rebate of Rs.5,000/-.
    I do donate to this NGO. If anybody else wants to donate they can contact the NGO at 23518009 or at their office at 10889, 2nd floor, East Park Road, Karol Bagh, New Delhi-5 or can even contact me at 9210008151.

  36. KULDEEP SADHU says:

    Sir please update me can as a DDO, i, allow deductions under 80gg to the staff while computing income tax for the f.y.2010-2011 or will the staff claim the benefit from income tax authorities after filinf thier ITR-Forms .
    Thanks
    Kuldeep Sadhu(DDO)

  37. Priyanka Agarwal says:

    i have donated to Helpage India and cancer aid research Foundation.So how much deduction can be claimed under Income tax Act. On Receipt of both its wriiten 100% of deduction is available.but under income tax act how much can be claimed?

  38. vicky mehta says:

    I donated Rs 100000/- to lal baughcha raja and forgot to take the receipt. Will i be ele-gible for deduction under section 80g?

  39. All Donations are Exmpted Under Section 80G(5) of the income tax act 1961
    Donate can be made by Cash/Cheques/Demand Draft /RTGS and payable at
    DHARMAGIRI SOCIAL WELFARE & DEVELOPMENT TRUST
    Bank Name : State Bank Of Mysore
    Account No : 64056807376
    Bank ifc code:SBMYOO40406
    Email:mukundakdswdt@gmail.com
    Website:dswdtrust.org

  40. Hi,

    I have donated some amount to a charitable trust (Sec 80G 100% exempt) during 2010. Can this be claimed during the assessment year 2011-2012.

    Thanks

  41. Hello,

    My trsut samson memorial education trust is registered with the goverment of Maharashtra and my trust is holding 80G certificate, you can go thru my website http://www.samsonmemorial.org.

    If you wish to make any donations or looking forward for tax deductions please get in touch.
    You can also contact me thru the website and also on mobile 9881079009 /7507949009

    Thank you
    Michael Samson

  42. Prateek Singh says:

    Hi,
    We have registered a New NGO at Delhi. Our mission is to provide free education in Himachal Pradesh(we don’t want to charge even a single rupee from any student in any form). Are we eligible for donations for the same. If yes how can we get one. The NGO is registered under Indian trust act at New Delhi.

  43. Respected Sir,
    I would like talk to you about Under Section 80C & 80G. Both are separated. If, yes, can I invested Rs. 1,00,000/- in 80C & Rs. 11,000/-in 80G. Thus the total amount 0f saving is Rs.1,11,000/- .
    My total Gross Salary is Rs. 3,66,703/-. I invested Rs. 13,500/- in LIC,Rs. 76,872/- in CPF & Rs.11,000/- in PPF Under Section 80C & Under section 80G is RS. 11,000/-.
    One ask question is how much amount of 80G on my Gross Total Income (Rs. 3,66,703/-).
    Please reply on my email id.
    With regards,
    RENU ARYA

  44. Respected Sir,
    I would like talk to you about Under Section 80C,80CCF & 80G. They are separated. If, yes, can I invested Rs. 1,00,000/- in 80C, Rs.10,000 in 80CCF & Rs. 11,000/-in 80G. Thus the total amount 0f saving is Rs.1,21,000/- .
    My total Gross Salary is Rs. 3,66,703/-. I invested Rs. 13,500/- in LIC,Rs. 76,872/- in CPF & Rs.11,000/- in PPF Under Section 80C, Rs. 10,000/- in 80CCf & Under section 80G is RS. 11,000/-.
    One ask question is how much amount of 80G on my Gross Total Income (Rs. 3,66,703/-).
    Please reply on my email id.
    With regards,
    RENU ARYA

  45. janak ramesh joshi says:

    Sir, My annual income is Rs. 3,89,000/- i have donate Rs- 40,000/- to the institution for multi disabled instition. The institution is given the certificate how much amount is entitled for rebate for 80 G.

  46. P Sasidhar Mohan says:

    I would like to know the position on the following ,
    A salaried employee having GTI Rs.25 lacs and availed Rs 1,00,000/- under 80 CCE also donated Rs,1,00,000/- under 80 G qualifying 50 %. If he intends to donate another sum of Rs 3,00,000/- under 80 G qualifying for 100% exemption.
    Request to qlarify will both donations are allowed or not ?.

  47. Hello,
    We would like to know more detail about donations given to any private trust up to Rs. 1.00 lacs annual in a religious trust (Temples) as per 80G of I.T. Act 50% of adjusted GTI Rs. 50,000/- is eligible as per rules applicable in payment of lump sum or it is also given by monthly / quarterly / half yearly from any individual name only or spouse & children name also for 80 G benefits by Individuals / HUF in Private Trust.
    Pl. share and update the knowledge about this.

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