Tax deduction u/s “80G” of Income Tax Act (relief on charity)

“80G” of the income tax act is the vast topic, this article reveals the facts on Tax deduction donation under section 80G made to certain charitable institutions under section 80g of income tax act.

Charity is treated as humanity towards society, help for the poor, that’s why Government provides relief under section 80g of the income tax act to encourage people for the better India.

In some cases, charity is 100% exempted from tax.

An amount donated by an individual to an eligible charity can be claimed as a tax deduction while filing an income tax return.

Also Read: What is Form 10 BA – “Declaration u/s 80GG” – House Rent

How to fill 80G in ITR1, there is a separate sheet available in the ITR form which required completed information, the amount declared as clarity would be adjusted as tax exemption according to the limit prescribed of the income tax department.

Tax deduction under section 80G

There are four subsections available in the form with different category and tax limit exemption:

Donations entitled for 100% deduction without qualifying limit (section A)

Under this category, the donation made is 100% deducted and are not subject to any limitation under section 80G.

List of donation acquires 100 % deduction without any upper limit declared by the Income-tax department, the list is amended from time to time:

1. National Blood Transfusion Council or to any State Blood Transfusion Council
2. An approved university/educational institution of National eminence
3. National Defence Fund (Central Government)
4. National Children’s Fund
5. Zila saksharta Samiti constituted in any district under the chairmanship of the collector of the district
6. National Cultural Fund
7. Fund set up for State government for the medical relief to the poor
8. Army Central Welfare Fund, Indian Naval Ben. Fund, Air Force Central Welfare Fund.
9. Fund for Technology Development and Application
10. Chief Minister’s Relief Fund or Lieutenant Governor’s Relief Fund with respect to any State or Union Territory
11. Chief Minister’s Earthquake Relief Fund, (Maharashtra)
12. Prime Minister’s Armenia Earthquake Relief Fund
13. Swachh Bharat Kosh (applicable from FY 2014-15)
14. Clean Ganga Fund (applicable from FY 2014-15)
15. National Fund for Control of Drug Abuse (applicable from FY 2015-16)
16. National Illness Assistance Fund
17. Andhra Pradesh Chief Minister’s Cyclone Relief Fund
18. National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation, and Multiple Disabilities
19. Indian Olympic Association/ other such notified association
20. Any fund set up by State Government of Gujarat for providing relief to the victims of an earthquake.
21. Any trust, institution or fund to which Section 80G(5C) applies for providing relief to the victims of the earthquake in Gujarat.

Also Read: Fill Income tax return ITR1 in 5 Minutes: The Complete Guide (Updated)

Donations entitled for 50% deduction without qualifying limit (section B)

This portion is indicated in the form in section B, under this category, the donation made is 50% deducted and are not subject to any limitation under section 80G.

Below is the category trusts allow you to avail the benefit u/s 80g deduction:

1. Rajiv Gandhi Foundation
2. Prime Minister’s Drought Relief Fund
3. Indira Gandhi Memorial Trust
4. Jawaharlal Nehru Memorial Fund
5. National Children’s Fund
6. World Vision India
7. Authority/ corporation having income exempt under erstwhile section or u/s 10(26BB)

This two category above (Section A & Section B) hold the benefit of without qualified limit. 

(Section C & Section D) is also entitled to 100% and 50% deduction but with qualifying limit:

Donations entitled for 100% deduction subject to qualifying limit (section C)

The qualified limit is (Subjected to 10% of adjusted gross total income).

1. Donations to the Government or a local authority for the purpose of promoting family planning.
2. Sums paid by a company to Indian Olympic Association, the institution established in India for the development of infrastructure for sports and games in India or the sponsorship of sports and games in India.

Also Read: Income tax rebate u/s “87 A” allowed to individual

Donations entitled for 50% deduction subject to qualifying limit (section D)

The qualified limit is (Subjected to 10% of adjusted gross total income).

1. 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.
2. Any fund or any institution which satisfies the conditions mentioned in Section 80G(5).
3. Repairs and renovation of any notified temple, mosque, gurudwara, church.

Example of deduction with the max limit of 10% adjusted gross total income

Eg: If your adjusted gross total income is ₹ 600000, then you are entitled to deduct (10% of ₹ 600000) i.e. ₹ 60000 for the case of (100% deduction subject to qualifying limit (section C)) & ₹ 30000 for the case of (50% deduction subject to qualifying limit (section D)).

The maximum limit to claim 80G under 80C is ₹ 150000. 

Documents required while claiming deduction u/s 80G

When an individual pay a sum amount there must a paper trail required to prove the claim u/s 80G as support.

Also Read: Tax relief under section 89(1) on salary arrears

Payment received duly sealed and signed

• The receipt should be in a proper format duly seal and signed by the authorized person to the trust.
• The amount paid by you should be clearly mentioned both in figures and numbers.
• Received should be addressed to you, with proper name and address along with your PAN number.
• The PAN number of the trust is also indicated on the receipt.
• Registration number of the trust along with validity is also mentioned on the receipt.

Form 58

If the donor is entitled to deduct 100% donation amount, It is mandatory to receive form 58 from the trust, without Form 58, your claim might be rejected. This form is also known as “80g donation receipt”.

 Donations made to foreign trusts is not elegible for deduction u/s 80G.

Also Read: What is Form 15G Form 15H?

The relation between Form 16 and 80 G

As we all known Form 16 reveals all the TDS deduction made by the employer to the employee If an employee claiming u/s 80G, it must be informed to the employer before issuing of Form 16 and the same will reflect in Form 26AS.

If you are unable to inform the employer or Form 16 is issued before, you must adjust the amount while filling your ITR.