Section 80G of IT Act- How to Get Tax Benefit Under Income Tax

Section 80G of IT Act provides benefits for both donor and donee, by making a donation taxpayer (donor) will get benefit by way of deduction from his Income, and by accepting the donation, trust (donee) will get benefit in respect of funds received for his welfare. In this post, we will discuss section 80G of the IT Act, 1961 from the point of view of the Taxpayers i.e. donors.

What is section 80G of the Income Tax Act

As per section 80G, the contribution made to certain relief funds and charitable institutions can be claimed as a deduction. Donations made to prescribed relief funds and charitable institutions are only eligible for deduction.

Who can claim deduction under section 80G of IT Act

This deduction is not restricted to any specific category of person and it can be claimed by any taxpayers- whether resident or non-resident, whether Individual, company, firm or any other person under the Act.

Must Read:- Know the procedure to get registration u/s 80G and/or section 12A

What mode of payment is allowed as a deduction under 80G of IT Act?

80G payment mode- The deduction under section 80G of IT Act can only be claimed when payment is made via a cheque, draft, or in cash.

80G deduction if payment in cash- From FY 2017-18 onwards payment made in cash in excess of Rs. 2,000 will not be eligible for deduction under section 80G of the Income Tax Act.

How to claim 80G Tax exemption

For claiming 80G Tax Exemption the following details have to be submitted in your Income Tax Return.

  • Name of the donee
  • PAN number of the donee
  • Address of the donee
  • Amount of contribution made

What is the section 80G Deduction Limit?

80G deduction eligibility- The first thing to remember that donations made to prescribed relief funds and charitable Institutions only eligible for deduction and not all donations made are eligible for 80G tax exemption.

80G deduction limit- The second thing to remember that there is also limits of % on the amount of donation made i.e 100% or 50%, which can be claimed accordingly.

To check the complete list of prescribes donations and % of the donation made you can click here.

Frequently Asked Questions

  1. How much is 80G exemption?

    As per section 80G of the Income Tax Act, donations made to prescribed relief funds and charitable Institutions only eligible for the deduction, and not all donations made are eligible for 80G tax exemption. There are limits of % on the amount of donation made i.e 100% or 50%, which can be claimed accordingly.

  2. How is 80G deduction calculated?

    Under Section 80G deduction is provided on the basis of certain parameters. Deduction of the amount contributed or donated from his gross total income depends on the kind of trust/organization, where the contribution is made.

  3. What is 80G?

    Section 80G allowed the contribution made to certain relief funds and charitable institutions as a deduction. Donations made to prescribed relief funds and charitable institutions are only eligible for deduction.

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Disclaimer: The information contained in the above article are solely for informational purpose after exercising due care. However, it does not constitute professional advice or a formal recommendation. The author does not own any responsibility for any loss or damage caused to any person, directly or indirectly, for any action taken on the basis of the above article.

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Compiled by- CA Chirag Agarwal (Practicing Chartered Accountants)

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