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Deductions for Donation under Section 80G of the Income Tax

Updated: Feb 5, 2021

All you need to Know about Tax Treatment of Donations

Donations exempt under 80G of Income Tax
Tax Treatment of Donations under 80G of Income Tax

Donation is part and parcel of every fortunate human being to share there fortune with less fortunate. Yes, it is really an admirable action and fundamental of ethics of sharing. Sharing can be of any type and to anyone. Income Tax Dept recognizes your good deeds too. Any donation to prescribed charitable institutions and other funds (as discussed further in this article) are eligible for deduction under Income Tax Act from Gross total income. Let's discuss in detail about which donations are eligible for deduction.

In this blog we will discuss about the eligibility, requirement, list of institutions for different qualifying limit, calculating maximum donation allowable for deduction and much more.

Section 80G and 80GGC of the Income Tax act states for the deduction for Donation to charitable institutions and Government respectively.

Lets first discuss about deductions for donation to prescribed charitable Institutions:

Who is Eligible?:

Every tax payer who makes donation to prescribed institutions can claim deduction for the same, subject to certain terms and condition.

Mode of Payment: 

Till FY 2017-18, only donations made in cash/cheque are eligible for deduction under 80G, but one should consider the following:

  • Cash donation is allowable up to Rs.10,000*/- only.

  • Donation in kind is not eligible for tax deduction.

  • Donor must obtain a valid donation receipt for availing deduction (it acts as a Valid proof).

  • Receipt should have Name, Address, PAN, Registration Number and validity of registration of Trust or Institution mentioned on it, and the amount of donation.