Section 80G & 80GGA: Donations Eligible for Income Tax Deduction

Section 80G of the Income Tax Act, 1961 offers taxpayers a tax deduction for donations made to approved charitable organisations, relief funds and trusts. It encourages people and businesses to support social causes while saving on tax. Section 80GGA extends similar benefits specifically for donations towards scientific research and rural development projects, broadening the scope of eligible philanthropic contributions. Both provisions help reduce taxable income when donations meet certain conditions and are properly documented.

What is Section 80G - Tax Benefits on Donations?

Section 80G allows a taxpayer to claim a deduction from gross total income for donations made to specified funds and institutions, reducing taxable income and overall tax liability. Approved organisations must have a valid 80G registration issued by the Income Tax Department.

Key Points About Section 80G

• The deduction is available when you donate money (not goods or services) to eligible entities in India.
• Donations must generally be made via non-cash modes (cheque, bank transfer, UPI) if above ₹2,000; cash donations over ₹2,000 are not eligible.
• Only the donor who claims the deduction needs to include the 80G certificate details when filing their ITR to get the benefit.

Eligible Donations Under Section 80G

Under Section 80G you can get tax benefits for donations to:

1. Government & Relief Funds (100% deduction without limit)

• Prime Minister’s National Relief Fund
• National Defence Fund
• State Chief Minister’s Relief Funds
  These typically qualify for 100% deduction of the donation amount without any cap.

2. Charitable Institutions & NGOs (50% or 100% based on approval)

• Many NGOs and trusts working on education, health, poverty alleviation, child welfare etc.
• Depending on the type of organisation and notification by the tax department, eligible donations may qualify for 50% or 100% deduction.

3. Other Eligible Funds with Conditions

• Some funds allow 100% deduction with a qualifying limit of 10% of adjusted gross total income (AGTI).

Important Conditions for Section 80G Deductions

To claim the deduction under Section 80G:

• The donee must be registered under Section 80G of the Income Tax Act.
• You must obtain a donation receipt with the donee’s 80G registration number, your name, PAN, and donation amount.
• The deduction can be claimed only under the old tax regime, not the new concessional tax regime.
• Donations in foreign currency are not eligible, only INR donations count.

Section 80GGA - Donations for Scientific Research & Rural Development

Section 80GGA specifically provides a 100% deduction on donations made for:

• Scientific research - Contributions to approved research institutions, universities or associations conducting scientific studies.
• Rural development - Donations to institutions or organisations carrying out rural development programmes and projects.

Conditions for Section 80GGA

• Deduction is available to individuals and HUFs unless income is from business/profession (in which case other provisions may apply).
• Donations must be made through non-cash modes above ₹10,000 (cash donations up to ₹10,000 are allowed).
• No upper limit on the amount you can donate and claim a 100% deduction.
• A Form 58A receipt or similar documentation is typically required from the institution to claim the deduction.

Who can claim deductions?

Both Section 80G and 80GGA deductions can generally be claimed by:

• Individuals
• Hindu Undivided Families (HUFs)
• Firms and Companies
• Non-Resident Indians (NRIs)
• Any other taxpayer with eligible donations provided they file under the old tax regime and include valid receipts.

How to claim the deduction?

To claim the deduction when filing your Income Tax Return (ITR):

1. Collect the 80G/80GGA donation receipt with required details.
2. Enter donation details under Chapter VI-A (80G/80GGA) in your ITR.
3. Ensure payment was made by eligible mode (non-cash if above ₹2,000 or ₹10,000 for 80GGA).
4. Keep receipts and certificates safely in case the tax department asks for verification.

Conclusion

Sections 80G and 80GGA of the Income Tax Act are powerful tools to encourage generosity while reducing taxable income. Section 80G offers deductions (usually 50% or 100%) for donations to approved charities and relief funds, while Section 80GGA provides a 100% deduction for donations toward scientific research and rural development. By donating through eligible channels and obtaining the correct receipts, taxpayers can support meaningful causes and benefit from significant tax savings.