Section 80G: Donations That Save Tax

TL;DR

100 percent vs 50 percent deduction, qualifying institutions, and the documentation you must keep.

Section 80G of the Income Tax Act is one of the most used deduction provisions among individuals filing returns in India — not because everyone donates, but because tax consultants often recommend it as a year-end tax-saving measure. But 80G has nuances that trip up even experienced taxpayers: the difference between 100% and 50% deduction, the qualifying limit that catches many people off guard, and the documentation requirements that cause claims to be rejected at the time of processing.

What Section 80G Does

Section 80G allows you to deduct the amount donated to specified charitable institutions and funds from your gross total income, thereby reducing your taxable income and tax liability. The deduction is available to all categories of taxpayers — individuals, HUFs, companies, firms, and any other assessee.

However, not all donations qualify. The donation must be made to an institution or fund that is approved by the Income Tax Department and notified under Section 80G. If you donate to a charity that is not on the approved list, the donation does not qualify for any deduction.

100% Deduction vs 50% Deduction

The first distinction to understand is between donations eligible for 100% deduction and those eligible for 50% deduction.

Donations Eligible for 100% Deduction (Without Qualifying Limit)

These donations qualify for full deduction — the entire amount donated is deductible, subject only to an overall ceiling:

• Prime Minister’s National Relief Fund (PMNRF)
• PM’s Chief Minister’s Relief Fund (state-specific)
• National Defence Fund
• Prime Minister Armed Forces Welfare Fund
• National Sports Fund
• National Culture Fund
• Army Central Welfare Fund
• Air Force Central Welfare Fund
• Navy Central Welfare Fund
• Any fund set up by the Central Government for禹 relief of victims of natural Calamities
• Any university or educational institution approved by the Central Government (certain categories)
• Any institution or fund for the time being notified by the Central Government for “solely charitable purposes”

Donations Eligible for 50% Deduction (Without Qualifying Limit)

These donations qualify for 50% deduction of the amount donated:

• Jawaharlal Nehru Memorial Fund
• Rajiv Gandhi Memorial Fund
• Indira Gandhi Memorial Fund
• The National Foundation for Communal Harmony
• Any approved charitable institution or trust
• A university or educational institution approved by the preseribed authority

Donations Subject to Qualifying Limit

Some donations qualify for 50% deduction but only up to 10% of your Adjusted Gross Total Income:

• Donations to certain notified institutions and funds
• Donations to trusts registered under the Foreign Contribution Regulation Act (FCRA)
• Any donation to an institution outside India

The qualifying limit means that if your adjusted gross total income is ₹10 lakhs and the donation is ₹2 lakhs (20%), only 10% of ₹10 lakhs = ₹1 lakh qualifies for the 50% deduction = ₹50,000 deductible.

The Qualifying Limit Trap

This is the most commonly missed rule. For donations to most approved charitable institutions (not the PMNRF, National Defence Fund, etc.), the maximum deductible amount is 50% of the donated amount, but only up to 10% of your Adjusted Gross Total Income.

Example:

• Your gross total income: ₹15 lakhs
• Donations made: ₹3 lakhs
• Adjusted Gross Total Income: ₹15 lakhs
• 10% of ₹15 lakhs = ₹1.5 lakhs (qualifying limit)
• Eligible donation amount: ₹1.5 lakhs (not ₹3 lakhs)
• Deduction at 50%: ₹75,000

Even if you donated ₹3 lakhs, only ₹75,000 is deductible. The remaining ₹2.25 lakhs provides no tax benefit.

Adjusted Gross Total Income — What It Means

Before calculating the 10% limit, your gross total income is reduced by:

• Long-term capital gains (if any)
• Short-term capital gains under Section 111A
• Income under Section 115A (dividends, lottery winnings)
• Deductions under Section 80C (except 80G itself)

The result is the Adjusted Gross Total Income, against which the 10% limit is applied.

Documentation Requirements

The most common reason 80G claims are rejected is inadequate documentation. You must obtain and preserve:

From the Donee Institution:

1. 80G Certificate — This is the most important document. It must contain:

   • Name of the donor (your name as it appears on your PAN)
   • PAN of the institution (the institution must have a valid 80G approval)
   • Address of the institution
   • Registration number and validity period of the 80G approval
   • Amount donated
   • Date of donation
   • Mode of donation (cheque, NEFT, cash — cash donations have restrictions)

2. Receipt — A proper receipt with the institution’s letterhead, stamp, and signature

3. Bank proof — If donated by cheque or NEFT, the bank statement showing the payment to the institution’s account. If donated by cash, the cash register receipt from the institution.

Important: Cash Donation Rules Donations in cash exceeding ₹2,000 are NOT eligible for deduction under 80G. If you donate by cash, you must use cheque, demand draft, NEFT, or any other banking channel to get the deduction. This rule was introduced specifically to prevent fake donation claims.

How to Claim 80G in ITR

When filing ITR-1 or ITR-2, you will find a field for Section 80G in the deductions schedule. You must:

1. Select the name of the donee institution from the approved list (MCA approved list)
2. Enter the registration number of the institution
3. Enter the amount donated
4. The system will automatically apply the qualifying limit

If the institution is not in the approved list, you cannot claim the deduction — even if you have a valid receipt.

PM Cares Fund — Special Treatment

Donations to the PM CARES Fund (Prime Minister’s Citizen Assistance and Relief in Emergency Situations Fund) qualify for 100% deduction without any qualifying limit. This was notified by the government in April 2020 and donations to PM CARES are treated at par with PMNRF.

Donations by Companies

Companies can also claim 80G deductions. The qualifying limit for companies is also 10% of adjusted gross total income. For companies, the adjusted gross total income is computed after adjusting for certain items including inter-company dividends and capital gains.

Companies making donations to the National Defence Fund or PM CARES Fund get 100% deduction without limit.

Year-End Planning for 80G

If you are planning a donation for tax purposes:

• Donate to PM CARES or National Defence Fund if you want certainty of full 100% deduction without limit
• Donate early in the financial year if you are donating to a regular charity — this gives you time to verify the institution is 80G approved before claiming
• Always pay by cheque or NEFT — never cash for donations above ₹2,000
• Get the 80G certificate before filing your ITR
• If you are donating a large amount, verify the institution’s 80G validity period — an expired approval means no deduction

Common Mistakes

• Donating in cash above ₹2,000 and still claiming the deduction
• Donating to an institution that has 80G approval but the approval has expired
• Not preserving the 80G certificate — it must be attached to ITR in some cases
• Missing the 10% qualifying limit on large donations to regular charities
• Donating to the wrong fund — confusing PMNRF with PM Cares or other government funds

Related guides

• ITR Filing service — ITR-1 through ITR-7 filing with 80G schedule included; our experts verify the 80G certificate validity and qualifying-limit calculation before filing.
• Old vs New Tax Regime guide — how 80G deductions interact with the new regime vs old regime and which regime gives a better effective take-home.
• TDS on Salary guide — how employer TDS is computed and how to claim refund if excess TDS was deducted due to incorrect 80G declarations.