Section 80G & 80GGA Deductions: Eligible Donations, Limits & Tax Rules

Donating to charitable institutions or approved relief funds not only supports important causes but can also reduce your taxable income. Under the Indian Income Tax Act, Sections 80G and 80GGA allow taxpayers to claim tax deductions for donations to specified national funds, government relief funds, and charitable contributions.

Many taxpayers are unaware of the Section 80G deduction, its maximum limit, and eligibility criteria, missing out on potential tax benefits. In this article, we will explain the types of suitable donations, Section 80G deductions, limits, and how these deductions can lower your overall tax liability.

What is Section 80G of the Income Tax Act?

Section 80G of the Income Tax Act allows taxpayers to claim tax deductions on relevant donations made to charitable institutions, government relief funds, registered trusts, NGOs, and other approved organisations. This provision encourages philanthropy and supports organisations working for social, educational, humanitarian, and medical relief causes.

To claim deductions under Section 80G, the organisation must hold a valid 80G registration or registration number. All taxpayers, including individuals, HUFs, partnerships, and LLPs, can reduce their net taxable income and tax liability under the Indian Income Tax Act.

Taxpayers must obtain a valid receipt from the approved organisation, which should include the registration number, donor details, amount donated, and the purpose of the donation. This is essential to substantiate the claim in Income Tax Returns.

Eligible Donations Under Section 80G of the Income Tax Act

Only donations made to organisations with a valid 80G certificate are eligible for tax deductions. The types of donations and limits are categorised as follows:

Donations Eligible for 100% Deduction (Without limit)

These donations qualify for a 100% deduction with no upper limit. Examples include contributions to:

• Prime Minister’s National Relief Fund (PMNRF)

• Prime Minister's Citizen Assistance and Relief in Emergency Situations Fund (PM CARES)

• National Defence Fund

• National Children’s Fund

Donations Eligible for 100% Deduction (With Limit)

Some donations qualify for a 100% deduction, but only up to 10% of the taxpayer’s adjusted gross total income. These include:

• Local authorities promoting family planning

• Approved institutions engaged in the development of sports or infrastructure

Donations Eligible for 50% Deduction (Without Limit )

Certain donations are eligible for a 50% deduction with no upper limit. Examples include:

• Jawaharlal Nehru Memorial Fund

• Prime Minister’s Drought Relief Fund

• Indira Gandhi Memorial Trust

Donations Eligible for 50% Deduction (With Limit)

Donations to registered charitable institutions qualify for a 50% deduction, but only up to 10% of adjusted gross total income. These include:

• Registered charitable trusts

• NGOs

• Temples, mosques, and churches

Also Read: New Income Tax Slabs for 2025-26: What Do the New Slabs Mean for You?

Section 80G of the Income Tax Act: Deductions and Donations

The table presents donations under Section 80G, their deduction percentages, and applicable limits.

What is Section 80GGA?

Section 80GGA allows taxpayers to claim tax deductions for donations made to approved causes, including rural development, scientific research, and other approved causes.

This section is available to all taxpayers except those with income from a business or profession. It was introduced to encourage charitable contributions and promote humanitarian and social development across the country. By donating to approved institutions under Section 80GGA, individuals can reduce net taxable income, lower overall liability, and enjoy additional tax benefits under the Income Tax Act.

Eligible Donations Under Section 80GGA

Donations under Section 80GGA fall into two categories:

1. Donations for Scientific Research:

• Contributions to approved scientific research associations, universities, colleges, or institutions engaged in scientific research.

• The institutions must be approved under the Income Tax Act to qualify for tax deductions.

2. Donations for Rural Development:

• Contributions to organisations approved under Section 35CCA, which promote rural development, community welfare, and social infrastructure in rural areas.

• Donations to the National Fund for Rural Development also qualify.

Only non-cash donations are eligible for deduction under Section 80GGA. Payments should be made through banking channels or UPI.

Tax Regime Applicability

Tax deductions under Section 80G and 80GGA are available only to taxpayers who opt for the old tax regime. These eligible deductions cannot be claimed under the new tax regime. Utilising these tax benefits in the old regime helps reduce net taxable income under the Income Tax Act.

How Donations Reduce Tax Liability

Suppose your gross total income is ₹10,00,000 and you donate ₹50,000 to the PM CARES Fund. Since this donation qualifies for a 100% deduction under Section 80G, your net taxable income reduces to ₹9,50,000. This directly lowers your tax liability for the financial year.

Similarly, donations to approved NGOs under Section 80GGA for rural development reduce taxable income for eligible taxpayers, providing additional tax savings.

Common Mistakes to Avoid While Claiming 80G & 80GGA Deductions

Avoiding these common errors helps ensure your Section 80G tax deductions, tax benefits, and tax exemption claims are accepted by the Income Tax Department without issues.

• Donating to Non-Approved Organisations: Donations made to institutions not approved by the Income Tax Department do not qualify for Section 80G or 80G deduction benefits. Always check the registration before donating.

• Making Cash Donations Above ₹2,000: Cash donations above ₹2,000 are not eligible for tax deductions or tax benefits under Section 80G or 80GGA. Use banking or digital payment modes.

• Not Collecting a Proper Donation Receipt: If you do not keep proper proof of the donated amount, your tax exemption claim may be rejected during income tax assessment.

• Incorrect Reporting in Income Tax Returns: Entering incorrect donation details can reduce eligible tax deductions and may attract queries from the Income Tax Department.

Documents Required to Claim Section 80G & 80GGA Tax Benefits

Keeping valid receipts and payment proof helps the Income Tax Department verify the amount you donated, ensure eligible tax deductions, and approve your Section 80G tax benefits.

• Valid Donation Receipt: A valid receipt is required to claim Section 80G tax benefits and should be issued by an approved organisation.

• Details of Donated Amount: The receipt must clearly state the donated amount, the donation date, and the payment mode for claiming tax exemption.

• 80G Registration Number: The organisation’s 80G deduction registration number must be mentioned to confirm eligibility under income tax rules.

• Proof of Payment: Bank statements or UPI records help support your tax deduction claim and ensure the donation is not incorrectly treated as exempt income.

• Special Case - Rural Development Fund: For donations to a rural development fund under Section 80GGA, approval details and payment proof are mandatory to claim tax benefits.

Valid Receipt & Registration Requirement

To claim deductions under Section 80G or 80GGA, it is essential to obtain a valid receipt from the approved organisation. The receipt should include:

• Organisation’s 80G or 80GGA registration number for verification of 80G deduction

• Donor’s name as mentioned in the income tax records

• Donation amount to support the claimed tax exemption

• Purpose of donation, such as relief funds or rural development fund

Without a valid receipt and registration details, your Section 80G tax benefits may be denied, and the Income Tax Department may issue a tax notice.

To Conclude

Section 80G and Section 80GGA allow taxpayers to support social welfare, scientific research, and rural development funds. This is while enjoying tax benefits and tax deductions under the income tax laws. By understanding eligible donations, 80G deduction limits, and Income Tax Department rules, donors can reduce their overall tax liability.

For additional financial support, taxpayers can explore Poonawalla Fincorp Personal Loan services. These loans offer quick access to funds and can help manage the donated amount, emergency expenses, or other personal financial needs simply and efficiently.

FAQs

Are all donations eligible for deduction under Section 80G?

No. Only donations made to government-approved funds and charitable institutions with valid 80G registration are eligible for tax deductions under the Income Tax Act.

Are cash donations allowed under Section 80G or Section 80GGA?

No. Cash donations above ₹2,000 are not eligible for deduction under Section 80G or 80GGA. Donations must be made through bank transfer, UPI, demand draft (DD), or other online payment modes to qualify for tax benefits.

How do I claim a deduction under Section 80GGA?

To claim deductions under Section 80GGA, the taxpayer must submit a valid receipt along with their Income Tax Returns. The receipt should include the name, PAN, address, and stamp of the approved organisation receiving the donation.

Can I claim a deduction for contributing to any foreign trust under sections 80G and 80GGA?

No. Contributions to foreign trusts are not eligible for tax deductions under Section 80G or Section 80GGA.

Is online crowdfunding eligible for Section 80G deduction?

Yes, but only if the platform and beneficiary institution are 80G registered and provide a legitimate donation receipt. This ensures that the donation qualifies for a deduction under the Income Tax Act.