The Income Tax Department has released a comprehensive set of FAQs to clarify the rules surrounding Section 80G. This guide aims to resolve confusion regarding which donations qualify for tax deductions, the documentation required, and the specific limits applied to religious and charitable contributions.
Thank you for reading this post, don't forget to subscribe!1. What is Section 80G?
Section 80G allows taxpayers to reduce their taxable income by donating to approved funds and charitable institutions. However, not every donation qualifies. To be eligible, the recipient must be:
- Expressly named in Section 80G(2)(a).
- Formally registered and approved by the Income Tax Department.
2. The Four Categories of Deductions
Donations are classified into four tiers based on how much you can deduct and whether there is a “qualifying limit” (usually 10% of your Adjusted Gross Total Income).
| Category | Deduction Amount | Maximum Limit | Examples |
| 100% Deduction (No Limit) | 100% of donation | No ceiling | National Defense Fund, PM CARES |
| 50% Deduction (No Limit) | 50% of donation | No ceiling | PM’s Drought Relief Fund |
| 100% Deduction (With Limit) | 100% of donation | Up to 10% of Adjusted GTI | Local authorities for family planning |
| 50% Deduction (With Limit) | 50% of donation | Up to 10% of Adjusted GTI | Registered Charities, Notified Temples/Churches |
3. Essential Compliance for Taxpayers
To ensure your claim is not rejected, the Department emphasizes three critical rules:
- The ₹2,000 Cash Rule: Any donation made in cash exceeding ₹2,000 is automatically ineligible for a deduction. Contributions above this amount must be made via digital modes, cheques, or drafts.
- Form 10BE (Your Receipt): It is no longer enough to just have a manual receipt. You must obtain Form 10BE (a Certificate of Donation) from the charity.
- Form 10BD (Their Report): The charity must file Form 10BD, listing your PAN and donation details. If the charity fails to file this, your deduction will not appear in your tax records and may be denied.
4. Special Focus: Religious Donations
The FAQs clarify that donations for the renovation or repair of notified temples, mosques, gurdwaras, or churches are eligible for a 50% deduction (subject to the 10% qualifying limit). Taxpayers should verify if the specific religious site is registered on the official exempted bodies list before claiming the benefit.
5. Who Can Claim?
Eligibility is broad. Any taxpayer with taxable income can claim these deductions, including:
- Individuals and Hindu Undivided Families (HUFs)
- Companies and Partnership Firms
- Trusts and other legal bodies
