Section 80G/ 80GGA/ 80GGC
Deduction in Respect for Donations

Section 80G: Deduction for Donations to certain Charitable Institutions, Funds etc

Section 80G of the income tax provides an income tax deduction to the tax-payers on donations made to charitable institutions and specified trusts/certain funds, etc. This deduction is available to all whether an individual, HUF, Company etc. Even non-residents are eligible for this deduction. The only condition is that the donation must be made in specified funds & institutions only.

Deductions can be claimed by taxpayers when they make donations through the following modes:

• Cheque
• Demand draft
• Cash (for donations below Rs 2,000)

Note: In-kind contributions such as food, material, clothes, medicines etc., and donations of above Rs 2,000 do not qualify for deduction under Section 80G. Donations above Rs 2,000 should be made in any mode other than cash to qualify under Section 80G.

Amount of deduction : Section 80G broadly categorize donations under 2 categories. First, donations without any qualifying limit & second, donations with a qualifying limit.

Donations without any Qualifying limit

If donation done in following institutions and trusts then 100% deduction allowed:

1. 1. National Defence Fund set up by the Central Government
   2. Prime Minister’s National Relief Fund
   3. National Foundation for Communal Harmony
   4. An approved university/educational institution of National eminence
   5. Zila Saksharta Samiti constituted in any district under the chairmanship of the Collector of that district
   6. Fund set up by a state government for medical relief to the poor
   7. National Illness Assistance Fund
   8. National Blood Transfusion Council or any State Blood Transfusion Council
   9. National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation, and Multiple Disabilities
   10. National Sports Fund
   11. National Cultural Fund
   12. Fund for Technology Development and Application
   13. National Children’s Fund
   14. Chief Minister’s Relief Fund or Lieutenant Governor’s Relief Fund with respect to any State or Union Territory
   15. The Army Central Welfare Fund or the Indian Naval Benevolent Fund or the Air Force Central Welfare Fund, Andhra Pradesh Chief Minister’s Cyclone Relief Fund, 1996
   16. The Maharashtra Chief Minister’s Relief Fund during October 1, 1993, and October 6, 1993
   17. Chief Minister’s Earthquake Relief Fund, Maharashtra
   18. Any fund set up by the State Government of Gujarat exclusively for providing relief to the victims of the earthquake in Gujarat
   19. Any trust, institution or fund to which Section 80G(5C) applies for providing relief to the victims of the earthquake in Gujarat (contribution made between January 26, 2001, and September 30, 2001)
   20. Prime Minister’s Armenia Earthquake Relief Fund
   21. Africa (Public Contributions – India) Fund
   22. Swachh Bharat Kosh (applicable from FY 2014-15)
   23. Clean Ganga Fund (applicable from FY 2014-15)
   24. National Fund for Control of Drug Abuse (applicable from FY 2015-16)

If donation done in following institutions and trusts then 50% deduction allowed:

1. 1. Prime Minister’s Drought Relief Fund
   2. Jawaharlal Nehru Memorial Fund
   3. Indira Gandhi Memorial Trust
   4. Rajiv Gandhi Foundation

Note: Donations to the last three funds will not be eligible for deduction from FY 2023-24 onwards

Donations with a Qualifying limit

         List of donations eligible for 100% deduction subject to 10% of adjusted gross total income

1. 1. Donations to the government or any approved local authority, institution or association to be utilised to promote family planning.
   2. Donation by a company to the Indian Olympic Association or any other notified association or institution established in India to develop infrastructure for sports and games in India or sponsor sports and games in India. 

List of Donations eligible for 50% deduction subject to 10% of adjusted gross total income

1. 1. Any other fund or institution satisfies the conditions mentioned in Section 80G(5).
   2. Government or any local authority, to be utilised for any charitable purpose other than promoting family planning.
   3. Any authority constituted in India to deal with and satisfy the need for housing accommodation or the purpose of planning, development or improvement of cities, towns, villages or both.
   4. Any corporation referred to in Section 10(26BB) for promoting the interest of the minority community.
   5. For repairs or renovation of any notified temple, mosque, gurudwara, church, or other places. 

Note : Donation to Shree Ram Trust is elegible for 50% dedcution of the amount donated for renovation/repair of the Mandir, Donations for purposes other than the renovation or repair of the temple are not eligible for deduction. Further, this 50% deduction under Section 80G shall be subject to the qualifying limit. 
Shri Ram Trust is notified under 80G(2)(b) from the F.Y. 2020-2021. Hence, donations made from the FY 2020-21 onwards are eligible for a deduction.

Note : Adjusted gross total income is the gross total income (sum of income under all heads) reduced by the aggregate of the following:

• Amount deductible under Sections 80C to 80U (but not Section 80G)
•  Exempt income
•  Long-term capital gains
• Short-term capital gains u/s 111A
• Income referred to in Sections 115A, 115AB, 115AC, 115AD and 115D                                    

Section 80GGA: Donations made towards Scientific Research or Rural Development

Section 80GGA allows deductions for donations made towards scientific research or rural development. This deduction is allowed to all assessees except those who have an income (or loss) from a business and/or a profession. Donations can be made through a cheque, a draft, or cash. However, cash donations over Rs 2,000 are not allowed as deductions.

Amount of deduction: 100% of the amount donated or contributed is eligible for deductions.               

Eligible Donations : The following donations are eligible for deductions under in this section

• 1. Sum paid to notified Rural Development Fund.
  2. Any sum paid to research association approved by the authority who undertakes scientific research.
  3. Sum paid to any college, university or any institution used for scientific research approved by the authority.
  4. Sum paid to approved association who undertakes rural development program.
  5. Any sum paid to the approved association who undertakes training of persons for implementing programs of rural development.
  6. Any donation paid to approved institution, public sector company or local authority to carry projects under section 35AC.
  7. Any notified fund for afforestation.
  8. Sum paid to approved national poverty eradication fund.

Note: Any deduction that is allowed under section 80GGA, the same expenses will not be deductible under any other section of the income tax act.  

Section 80GGC: Donations or contributions made towards political party

Section 80GGC provides for tax deductions with respect to donations made by taxpayers towards political parties or any electoral trusts. It encourages individuals to financially support the political system and claim tax deductions against such donations to lower their tax liability. Donations or contributions made in cash or in kind cannot be claim as deduction. It should be made to through legitimate banking portals, such as internet banking, credit cards, debit cards, cheques, demand drafts etc. to claim deductions under Section 80GGC.

Any individual, Hindu Undivided Family (HUF), an AOP or BOI, a firm, and an artificial juridical person which is not wholly or partly funded by the government are eligible to claim deduction under Section 80GGC. Except companies, local authorities, and artificial juridical person which is wholly or partly funded by the Government.

Amount of deduction: 100% of a taxpayer’s donation to a registered electoral trust or political party can be claimed as deduction. However, since this section is under Chapter VIA deductions, the total deduction cannot surpass the total income of an individual donating.

Conditions:  In order to claiming tax deduction under this section, A receipt for proof of donation which contain details like PAN, TAN, address of the political party, fund registration number, payment method, and donor name must be available also Income tax return form must be completed and submitted within a specific time.

Note :  if an individual opts for the New Tax Regime, then deduction under Section 80G/ 80GGA/80GGC will not be claimable.