80G Deductions under Income Tax Act 1961-2020

This article is about Section 80G Deductions allowed in computing the total income of an assessee under Income-tax Act, 1961-2020.

80G Deduction in respect of donations to certain funds, charitable institutions, etc.

Eligible Assessee: All Assessees under Income tax

Amount of deduction allowed in a year:

(A). Whole of the sum paid as Donation is allowed in following cases:

1. National Defence Fund set up by the Central Government
2. Prime Minister's National Relief Fund or (PM CARES FUND)
3. Prime Minister's Armenia Earthquake Relief Fund;
4. Africa (Public Contributions - India) Fund
5. National Children's Fund
6. The National Foundation for Communal Harmony; or
7. University or any educational institution of national eminence as may be approved by the prescribed authority in this behalf; or
8. The National Sports Fund to be set up by the Central Government;
9. The National Cultural Fund set up by the Central Government; 
10. The Fund for Technology Development and Application set up by the Central Government; or
11. The National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities
12. The Swachh Bharat Kosh, set up by the Central Government, other than the sum spent by the assessee in pursuance of Corporate Social Responsibility under sub-section (5) of section 135 of the Companies Act, 2013 (18 of 2013);
13. The Clean Ganga Fund, set up by the Central Government, where such assessee is a resident and such sum is other than the sum spent by the assessee in pursuance of Corporate Social Responsibility under sub-section (5) of section 135 of the Companies Act, 2013 (18 of 2013); or
14. The National Fund for Control of Drug Abuse 
15. Any fund set up by a State Government to provide medical relief to the poor;
16. The Army Central Welfare Fund or the Indian Naval Benevolent Fund or the Air Force Central Welfare Fund established by the armed forces of the Union for the welfare of the past and present members of such forces or their dependants; or
17. The Andhra Pradesh Chief Minister's Cyclone Relief Fund, 1996; or
18. The National Illness Assistance Fund; or
19. The Maharashtra Chief Minister's Relief Fund during the period beginning on the 1st day of October, 1993 and ending on the 6th day of October, 1993 or to the Chief Minister's Earthquake Relief Fund, Maharashtra;
20. Any fund set up by the State Government of Gujarat exclusively for providing relief to the victims of earthquake in Gujarat; or
21. Any Zila Saksharta Samiti constituted in any district under the chairmanship of the Collector of that district for the purposes of improvement of primary education in villages and towns in such district and for literacy and post-literacy activities.
22. The National Blood Transfusion Council or to any State Blood Transfusion Council which has its sole object the control, supervision, regulation or encouragement in India of the services related to operation and requirements of blood banks.
23. The Chief Minister's Relief Fund or the Lieutenant Governor's Relief Fund in respect of any State or Union territory, as the case may be :
    Provided that such Fund is—
    (a)  the only Fund of its kind established in the State or the Union territory, as the case may be;
    (b)  under the overall control of the Chief Secretary or the Department of Finance of the State or the Union territory, as the case may be;
    (c)  administered in such manner as may be specified by the State Government or the Lieutenant Governor, as the case may be; or
24. Any sums paid by the assessee, during the period beginning on the 26th day of January, 2001 and ending on the 30th day of September, 2001, to any trust, institution or fund to which this section applies for providing relief to the victims of earthquake in Gujarat.
25. {The Government or to any such local authority, institution or association as may be approved in this behalf by the Central Government, to be utilised for the purpose of promoting family planning;
26. Any sums paid by the assessee, being a company, in the previous year as donations to the Indian Olympic Association or to any other association or institution established in India, as the Central Government may, having regard to the prescribed guidelines, by notification in the Official Gazette, specify in this behalf for—
    (i)  the development of infrastructure for sports and games; or
    (ii)  the sponsorship of sports and games,in India;}

(B). Amount equal to 50% of Donation is allowed in following cases:

1. The Jawaharlal Nehru Memorial Fund
2. The Prime Minister's Drought Relief Fund; 
3. The Indira Gandhi Memorial Trust
4. The Rajiv Gandhi Foundation
5. {The Government or any local authority, to be utilised for any charitable purpose other than the purpose of promoting family planning; or
6. An authority constituted in India by or under any law enacted either for the purpose of dealing with and satisfying the need for housing accommodation or for the purpose of planning, development or improvement of cities, towns and villages, or for both;
7. Any corporation referred to in clause (26BB) of section 10; 
8. Any sums paid by the assessee in the previous year as donations for the renovation or repair of any such temple, mosque, gurdwara, church or other place as is notified by the Central Government in the Official Gazette to be of historic, archaeological or artistic importance or to be a place of public worship of renown throughout any State or States;
9. Any other fund or any institution to which this section applies (only if it is established in India for a charitable purpose and if it fulfils the prescribed conditions)}

Where the aggregate of the sums referred to in part (A)- 25,26 and part (B)-5,6,7,8,9 points(mentioned in red colour above) exceeds 10% of the gross total income (as reduced by any portion thereof on which income-tax is not payable under any provision of this Act and by any amount in respect of which the assessee is entitled to a deduction under any other provision of this Chapter), then the amount in excess of 10% of the gross total income shall be ignored for the purpose of computing deduction is to be allowed under sub-section (1) of section 80G

Note:

• No deduction shall be allowed under this section in respect of donation of any sum exceeding Rs 2000 unless such sum is paid by any mode other than cash.
• "charitable purpose" does not include any purpose the whole or substantially the whole of which is of a religious nature.
• For the purposes of this section, an association or institution having as its object the control, supervision, regulation or encouragement in India of such games or sports as the Central Government may, by notification in the Official Gazette, specify in this behalf, shall be deemed to be an institution established in India for a charitable purpose.
• For the removal of doubts, it is hereby declared that a deduction to which the assessee is entitled in respect of any donation made to an institution or fund to which sub-section (5) of section 80G applies shall not be denied merely on either or both of the following grounds, namely :—
  (i)  that, subsequent to the donation, any part of the income of the institution or fund has become chargeable to tax due to non-compliance with any of the provisions of section 11, section 12 or section 12A;
  (ii)  that, under clause (c) of sub-section (1) of section 13, the exemption under section 11 or section 12 is denied to the institution or fund in relation to any income arising to it from any investment referred to in clause (h) of sub-section (2) of section 13 where the aggregate of the funds invested by it in a concern referred to in the said clause (h) does not exceed five per cent of the capital of that concern
• For the removal of doubts, it is hereby declared that claim of the assessee for a deduction in respect of any donation made to an institution or fund to which the provisions of sub-section (5) apply, in the return of income for any assessment year filed by him, shall be allowed on the basis of information relating to said donation furnished by the institution or fund to the prescribed income-tax authority or the person authorised by such authority, subject to verification in accordance with the risk management strategy formulated by the Board from time to time.
• Where a deduction under this section is claimed and allowed for any assessment year in respect of any sum specified in sub-section (2), the sum in respect of which deduction is so allowed shall not qualify for deduction under any other provision of this Act for the same or any other assessment year.
• Notwithstanding anything contained in clause (ii) of sub-section (5) and Explanation 3, an institution or fund which incurs expenditure, during any previous year, which is of a religious nature for an amount not exceeding five per cent of its total income in that previous year shall be deemed to be an institution or fund to which the provisions of this section apply.
• An institution or fund established for the benefit of Scheduled Castes, backward classes, Scheduled Tribes or of women and children shall not be deemed to be an institution or fund expressed to be for the benefit of a religious community or caste within the meaning of clause (iii) of sub-section (5).

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