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 deductions by individuals filing returns in India. Tax consultants often recommend it as a year-end tax-saving tool. But 80G has details that trip up even experienced taxpayers.

These include the difference between 100% and 50% deduction. They also include the qualifying limit that surprises many people. And the documentation requirements that cause claims to be rejected during processing.

What Section 80G Does

Section 80G lets you deduct donated amounts to specified charitable institutions and funds from your gross total income. This reduces your taxable income and tax liability. The deduction is available to all taxpayers. This includes individuals, HUFs, companies, firms, and any other assessee.

But not all donations qualify. The donation must be to an institution or fund approved by the Income Tax Department and notified under Section 80G. If you donate to a charity not on the approved list, you get no deduction.

100% Deduction vs 50% Deduction

The first thing to understand is the difference 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 donated amount 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 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 donated amount.

• 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 prescribed 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 it is 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 you calculate 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. The 10% limit is applied against this figure.

Documentation Requirements

The most common reason 80G claims are rejected is missing or wrong documents. You must get and keep the following from the donee institution.

80G Certificate:

This is the most important document. It must contain the name of the donor (your name as it appears on your PAN). It must contain the PAN of the institution. The institution must have a valid 80G approval. It must also contain the address of the institution. And the registration number and validity period of the 80G approval. And the amount donated. And the date of donation. And the mode of donation (cheque, NEFT, cash — cash donations have restrictions).

Receipt:

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

Bank proof:

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

Important: Cash Donation Rules

Cash donations over ₹2,000 do NOT qualify for deduction under 80G. If you donate by cash, you must use cheque, demand draft, NEFT, or another banking method to get the deduction. This rule was introduced to prevent fake donation claims.

How to Claim 80G in ITR

When you file ITR-1 or ITR-2, you will see a field for Section 80G in the deductions schedule. You must do the following.

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 on the approved list, you cannot claim the deduction — even with a valid receipt.

PM Cares Fund — Special Treatment

Donations to the PM CARES Fund qualify for 100% deduction without any limit. The government notified this in April 2020. Donations to PM CARES are treated the same as 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 calculated after adjusting for certain items. These include 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, note these tips.

• 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 pay 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

Here are common errors to avoid.

• Donating in cash over ₹2,000 and still claiming the deduction.
• Donating to an institution that has 80G approval but the approval has expired.
• Not keeping 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.