80G conditions

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Under Section 80G ( Donation Exemption), what are the conditions to avail exemptions ?

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1. Essential Conditions for claiming Deduction under this Section 80G :

  1. Deduction under this section is allowed to all assessees, whether company or non-company, whether having income under the head ā€˜profits and gains of business or professionā€™ or not.
  2. The donation should be of a sum of Money. (Donations in Kind do not qualify for deduction.)
  3. The donation should be made only to specified funds / institutions.
  4. No deduction shall be allowed under this section in respect of donation of any sum exceeding Rs. 2,000 unless such sum is paid by any mode other than cash.
  5. For availing deduction under this section it is obligatory on the part of the assessee to produce proper proof of payment. Where the payment is not proved by production of proper receipt, etc., the deduction under section 80G is not available.
  6. Where a deduction is allowed in respect of any donation for any assessment year, no other deduction shall be allowed in respect of such sum for the same or any other assessment year.

2. Amount Deductible Under Section 80G

Deduction u/s 80G is available on account of any donation made by the assessee to specified funds or institutions. In some cases, deduction is available after applying a qualifying limit while in others, it is allowed without applying any qualifying limit. Again in some cases, deduction is allowed to the extent of 100% of the donation and in some cases it is allowed to the extent of 50% of the donation. The quantum of deduction in respect of various kinds of donations is given as under:

(A) Donations U/s 80G made to following are eligible for 100% Deduction without any Qualifying Limit:

  1. National Defence Fund set up by the Central Government.
  2. Prime Ministerā€™s National Relief Fund;
  3. Prime Ministerā€™s Armenia Earthquake Relief Fund;
  4. Africa (Public Contributions India) Fund;
  5. National Foundation for Communal Harmony;
  6. University/Educational Institution of National Eminence approved by the prescribed authority;
  7. Maharashtra Chief Ministerā€™s Earthquake Relief Fund;
  8. Any fund set up by the State Government of Gujarat, exclusively for providing relief to the victims of earthquake in Gujarat;
  9. Zila Saksharta Samiti constituted in any district;
  10. The National Blood Transfusion Council or any State Blood Transfusion Council;
  11. Any fund set up by a State Government to provide medical relief to the poor;
  12. The Army Central Welfare Fund or the Indian Naval Benevolent Fund or the Air Force Central Welfare Fund;
  13. The Andhra Pradesh Chief Ministerā€™s Cyclone Relief Fund, 1996;
  14. National Illness Assistance Fund;
  15. The Chief Ministerā€™s Relief Fund or the Lieutenant Governorā€™s Relief Fund in respect of any State or Union Territory, as the case may be;
  16. National Sports Fund set up by the Central Government;
  17. National Cultural Fund set up by the Central Government;
  18. Fund for Technology Development and Application, set up by the Central Government;
  19. National Trust for Welfare of persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities;
  20. National Childrenā€™s Fund.
  21. Donations made by any assessee (resident and non-resident) to the Swachh Bharat Kosh set up by the Central Government (inserted by the Finance Act, 2015 w.r.e.f. A.Y. 2015-16);
  22. Donations made by a resident assessee to Clean Ganga Fund set up by the Central Government (inserted by the Finance Act, 2015 w.r.e.f. A.Y. 2015-16);
  23. The National Fund for Control of Drug Abuse (inserted by the Finance Act, 2015 w.e.f. A.Y. 2016-17).

(B) Donations U/s 80G made to the following are eligible for 50% Deduction without any Qualifying Limit:

  1. Jawaharlal Nehru Memorial Fund;
  2. Prime Ministerā€™s Drought Relief Fund;
  3. Indira Gandhi Memorial Trust;
  4. Rajiv Gandhi Foundation.

(C) Donations U/s 80G to the following are eligible for 100% Deduction subject to Qualifying Limit:

  1. Donation to Government or any approved local authority, institution or association to be utilised for promoting family planning.
  2. Any sums paid by the assessee, being a company, in the previous year as donations to Indian Olympic Association or to any other association or institution established in India and notified by the Central Government forā€”
  3. the development of infrastructure for sports and games; or
  4. the sponsorship of sports and games, in India.

(D) Donations U/s 80G to the following are eligible for 50% Deduction subject to Qualifying Limit:

  1. Donation to Government or any approved local authority, institution or association to be utilised for any charitable purpose other than promoting family planning.
  2. Any other fund or institution which satisfies the conditions of section 80G(5).
  3. To any authority constituted in India by or under any law for satisfying the need for housing accommodation or for the purpose of planning development or improvement of cities, towns and villages or for both.
  4. To any corporation established by the Central or any State Government specified under section 10(26BB) for promoting interests of the members of a minority community.
  5. Any notified temple, mosque, gurdwara, church or other place notified by the Central Government to be of historic, archaeological or artistic importance, for renovation or repair of such place.

3. Net Qualifying Amount

For applying qualifying limit, all donations made to funds/institutions covered under (C) and (D) above shall be aggregated and the aggregate amount shall be limited to 10% of Adjusted Gross Total Income.

Adjusted Gross Total Income:

The following shall be Deducted from Gross Total Income to find out Adjusted Gross Total Incomeā€”

  1. amount deductible under sections 80C to 80U (but not section 80G);
  2. such incomes on which income-tax is not payable; i.e. share from AOP.
  3. long-term capital gains;
  4. short-term capital gain which is taxable under section 111A at the rate of 15% ; and
  5. incomes referred to in section 115A, 115AB, 115AC, 115ACA or 115AD.

4. Quantum of Deduction U/s 80G

The quantum of deduction shall be the aggregate of the deductions permissible under clauses (A), (B), (C) and (D).

5. Mode of Payment in respect of Donation U/s 80G

Donation can be given in cash or by cheque or draft.

However, no deduction shall be allowed under section 80G in respect of donation in cash of an amount exceeding Rs. 2,000.