Section 80G: In our country people are friendly and kind they like to do charities and donations out of their incomes in every financial year but such income will be included in taxable part.
The Government of India brought this section 80G donation deduction in order to decrease tax burden of assessee on such income which is donated by them.
Eligible Person for claiming deduction under section 80G
All Assessee having income are eligible for deduction if donation is made or amount is paid to any one of specific funds which are distributed in below mentioned four categories-
Amount of deduction available
1. Category A : 100% of paid amount is allowed as deduction u/s 80G
2. Category B : 50% of paid amount is allowed as deduction u/s 80G
3. Category C : 100% of qualifying amount is allowed as deduction u/s 80G
4. Category D : 50% of qualifying amount is allowed as deduction u/s 80G
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Mode of making donation for Tax Deduction
| Donation up to Rs. 2000 | Any mode (cash/bank etc.) |
| Donation exceeding Rs. 2000 | Any mode other than Cash |
Meaning of Qualifying Amount
Qualifying Amount is lower of –
- 10% of ADJUSTED GROSS TOTAL INCOME
- Donation Given (Category C and Category D only)
Adjusted gross total income
| Particular | Amount |
|---|---|
| Gross Total Income | XXXX |
| Less: Long Term Capital Gain u/s 112 and 112A (Special Income) | (XXXX) |
| Less: Short Term Capital Gain u/s 111A (only Special Income Part) | (XXXX) |
| Less: All deduction in chapter XI (80C to 80U) except 80G | (XXXX) |
| Less: Income u/s 115A, 115AB, 115AC, 115AD, 115D | (XXX) |
| Adjusted Gross Total Income | XXXX |
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Description of each category
Category A
- PM CARES Fund
- National Defence Fund set up by the Central Government
- National Foundation for Communal Harmony
- An approved university/educational institution of National eminence
- Zila Saksharta Samiti constituted in any district under the chairmanship of the Collector of that district
- Fund set up by a State Government for the medical relief to the poor
- National Illness Assistance Fund
- National Blood Transfusion Council or to any State Blood Transfusion Council
- Fund for Technology Development and Application
- National Children’s Fund
- National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation, and Multiple Disabilities
- Prime Minister’s National Relief Fund
- National Sports Fund
- National Cultural Fund
- Chief Minister’s Relief Fund or Lieutenant Governor’s Relief Fund with respect to any State or Union Territory
- 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
- The Maharashtra Chief Minister’s Relief Fund during October 1, 1993 and October 6, 1993
- Chief Minister’s Earthquake Relief Fund, Maharashtra
- Any fund set up by the State Government of Gujarat exclusively for providing relief to the victims of the earthquake in Gujarat
- Any trust, institution or fund to which Section 80G(5C) applies for providing relief to the victims of the earthquake in Gujarat (contribution made during January 26, 2001, and September 30, 2001) or
- Prime Minister’s Armenia Earthquake Relief Fund
- Africa (Public Contributions – India) Fund
- Swachh Bharat Kosh (applicable from FY 2014-15)
- Clean Ganga Fund (applicable from FY 2014-15)
- National Fund for Control of Drug Abuse (applicable from FY 2015-16)
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Category B
- Jawaharlal Nehru Memorial Fund
- Prime Minister’s Drought Relief Fund
- Indira Gandhi Memorial Trust
- Rajiv Gandhi Foundation
Category C
- Donations to the government or any approved local authority, institution or association to be utilized for the purpose of promoting family planning
- Donation by a Company to the Indian Olympic Association or to any other notified association or institution established in India for the development of infrastructure for sports and games in India, or the sponsorship of sports and games in India.
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Category D
- Any notified temple, mosque, gurdwara, church or other places for the purpose of renovation or repairs
- Any corporation specified in section10 (26BB) for promoting the interest of minority community.
- Donation Given to any other charitable institution, social organizations or religious organizations for purpose other than family planning approved by government.
- Any authority constituted in India for dealing with and satisfying the needs for housing accommodation or for the purpose of planning/development of towns, villages, etc.
- Funds/ Institutions which satisfies conditions mentioned under section 80G(5)
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Example
Mr. X whose GTI (gross total income) is Rs 6,40,000 for FY 19-20 out of which LTCG is Rs 50,000.
Deduction under 80C for Rs 50,000. Donation to charitable trust for other than family planning for Rs 25,000. Find deduction u/s 80G?
Answer: Donation is done to trust other than family planning so such donation falls under Category D, 50% of qualifying Amount will be allowed as deduction to Mr. X.
Qualifying Amount is lower of –
- Paid amount-25,000
- 10% of Adjusted Gross total Income- 10% of 540000= 54000
| Particular | Amount |
|---|---|
| Gross Total Income | 640000 |
| Less: Long Term Capital Gain u/s 112 and 112A (Special Income) | (50000) |
| Less: Short Term Capital Gain u/s 111A (only Special Income Part) | 0 |
| Less: All deduction in chapter XI (80C to 80U) except 80G | (50000) |
| Adjusted Gross Total Income | 540000 |
Qualifying Amount = 25,000
Deduction u/s 80G= 50% of 25000= 12,500
The author of the above article is Aditya Kishore.
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