How to Claim Section 80G Donation Deduction While E-Filing
- Rashmita Choudhary
- 2 days ago
- 9 min read
Claiming a donation deduction under Section 80G while e-filing your Income Tax Return (ITR) requires compliance with certain documentation, payment modes, and eligibility rules. The deduction is available only for donations made to approved charitable institutions registered under Section 80G of the Income Tax Act, 1961. Donors must hold valid receipts, ensure correct entry in the ITR’s “Schedule 80G” section, and retain proof for future verification. This guide explains the full process of claiming Section 80G deduction, from identifying eligible donations to correctly filing the claim online.
Table of Contents
Eligibility and Valid Receipts for Section 80G Deductions
To claim a deduction under Section 80G, the donation must be made to an approved charitable organization or institution registered under Section 12A or 80G of the Income Tax Act. Only donations made to entities with a valid 80G registration number issued by the Income Tax Department qualify for deduction. The donor must obtain a valid receipt containing the name, address, and PAN of the trust, the donation amount (in figures and words), and the registration number with its validity period. The donation should be voluntary, not in exchange for any benefit, service, or favour.
Accepted Modes of Payment for Claiming Donation Deduction
Section 80G of the Income Tax Act provides tax deductions for donations made to eligible charitable institutions and funds. However, these deductions are allowed only when the donation is made through approved and traceable payment modes. Acceptable methods include cheque, demand draft, debit or credit card payments, and electronic transfers such as UPI, NEFT, or RTGS. These modes ensure transparency and verifiability, allowing both the donor and the Income Tax Department to track the flow of funds.
Cash donations are subject to strict limits. A taxpayer can claim a deduction for cash donations only up to ₹2,000 in a financial year. Any amount donated in cash beyond this limit will not qualify for deduction under Section 80G, even if it is made to a registered charitable organization. This restriction was introduced to promote digital payments and maintain accountability in charitable contributions.
Donations made in kind, such as providing food, clothes, medicines, or other goods, do not qualify for tax deduction under this section. The reason is that such contributions cannot be monetarily verified or tracked in the same way as monetary donations. Only financial donations with clear documentation and transfer records are considered eligible for deduction.
While claiming deductions, it is essential to maintain valid proof of payment. Taxpayers should keep copies of donation receipts, bank statements, or transaction records that clearly mention the name of the donee, registration number under Section 80G, and the mode of payment used. These documents serve as evidence during e-filing and in case of any verification by the Income Tax Department.
By following these payment and documentation rules, taxpayers can claim legitimate benefits under Section 80G while ensuring compliance with tax regulations. Using digital or traceable payment methods not only guarantees transparency but also strengthens the credibility of charitable contributions made during the financial year.
How to Determine Deduction Percentage under Section 80G
The deduction percentage under Section 80G depends on the type of charitable organization receiving the donation. Donations are generally classified into four categories: 100% deduction without limit, 50% deduction without limit, 100% deduction subject to 10% of adjusted gross total income, and 50% deduction subject to 10% of adjusted gross total income. For example, donations to the Prime Minister’s National Relief Fund or National Defence Fund qualify for 100% deduction without limit, while contributions to approved charitable trusts may qualify for 50% deduction within the 10% cap.
Form 10BE Requirement for Claiming Section 80G Deduction
Form 10BE plays a crucial role in ensuring that a taxpayer’s claim for deduction under Section 80G of the Income Tax Act is valid and verifiable. It serves as an official certificate issued by the charitable organisation or trust that receives the donation. The form certifies that the donation was made by the individual donor and provides essential details such as the donor’s full name, PAN, address, the amount donated, mode of payment, and the registration number or approval number of the trust or institution.
From the financial year 2021–22 onwards, it has become mandatory for charitable organisations registered under Section 80G to file Form 10BD, which contains the particulars of donations received during the year. The details submitted in Form 10BD are then reflected in the donor’s Form 26AS and Annual Information Statement (AIS). Based on this information, the organisation must issue Form 10BE to each donor on or before May 31 of the following financial year.
For taxpayers, Form 10BE acts as evidence of the donation being reported to the Income Tax Department by the receiving organisation. When filing an income tax return, the deduction claimed under Section 80G should match the information available in Form 26AS or AIS. If there is any mismatch—such as the charitable institution not submitting Form 10BD or issuing Form 10BE—the Income Tax Department may disallow the deduction, even if the donor holds a physical donation receipt.
This verification system has been introduced to ensure transparency, prevent misuse of charitable deductions, and maintain an accurate record of genuine donations. Therefore, before claiming any deduction under Section 80G, donors must confirm that the organization has filed Form 10BD and issued Form 10BE. Retaining this certificate along with the donation receipt ensures smooth verification during tax assessment and prevents the risk of deduction denial.
How to Claim Section 80G Donation Deduction While E-Filing
To claim the deduction, log into the Income Tax e-filing portal and navigate to the “Deductions” section while filing your return. Enter the details of the donation—such as institution name, PAN, donation amount, and deduction percentage—under Section 80G. If filing through a professional platform like TaxBuddy, these details are auto-populated using your Form 26AS and verified donation records. The platform ensures that all entries match the information reported by the charitable institution, minimizing the risk of mismatches or notices.
Documentation and Record Maintenance
Taxpayers must retain essential documents such as the original donation receipt, Form 10BE, and bank proof of payment. In case of large donations, institutions may also provide acknowledgment letters or copies of their registration certificates, which can be useful during scrutiny. It is advisable to store digital copies of all documents for at least six years, as the Income Tax Department may verify the validity of claims during assessments or through AIS data checks.
Is Section 80G Deduction Allowed in the New Tax Regime?
Under the new tax regime introduced under Section 115BAC, most deductions—including those under Section 80G—are not available. Taxpayers opting for the new regime cannot claim donation-based deductions, even if the payments are made to registered charitable trusts. However, those following the old tax regime continue to enjoy full benefits under Section 80G, provided they meet all eligibility and documentation conditions. Hence, individuals making frequent donations may find the old regime more beneficial.
How Section 80G Works in the Old Tax Regime
In the old tax regime, donations to eligible organizations can significantly reduce taxable income. After computing gross total income, the eligible deduction amount under Section 80G is subtracted to arrive at the taxable income. Depending on the organization, the deduction may be 50% or 100% of the donation, subject to applicable limits. For example, if the adjusted gross total income is ₹10 lakh and ₹1 lakh is donated to an eligible 50%-deduction organization, the taxpayer can claim ₹50,000 as a deduction.
Disallowed Donations and Common Mistakes to Avoid
Donations made in cash exceeding ₹2,000, or in kind, are not eligible for deductions. Payments to unregistered organizations or political parties (not covered under Section 80GGC) are also disallowed. Many taxpayers fail to verify the registration validity of the trust, resulting in claim rejection. Another common error is claiming deductions without obtaining Form 10BE, which leads to discrepancies in the Income Tax Department’s data. Always cross-check donation details in Form 26AS or AIS before filing.
Simplify Section 80G Claims with TaxBuddy
Filing deductions manually can be error-prone, especially when tracking different donation categories. TaxBuddy simplifies the process by automatically reading your Form 26AS and identifying eligible 80G deductions. It ensures accurate matching with verified organizations and calculates the correct percentage of deduction applicable. With expert-assisted plans, TaxBuddy professionals review all donation receipts and forms before submission, helping taxpayers claim maximum benefits without compliance issues.
Conclusion
Section 80G deductions are a meaningful way to encourage charitable giving while reducing tax liability. Understanding eligibility rules, payment modes, and documentation requirements ensures a smooth claiming process. Filing with the help of professionals through verified platforms can make compliance effortless.
For anyone looking for assistance in tax filing, it is highly recommended to download the TaxBuddy mobile app for a simplified, secure, and hassle-free experience.
FAQs
Q1. What types of donations qualify for deduction under Section 80G? Donations made to government-approved charitable institutions, relief funds, and NGOs registered under Section 80G of the Income Tax Act qualify for deductions. These include contributions to the Prime Minister’s National Relief Fund, National Defence Fund, and other recognized welfare trusts or organizations that hold valid 80G certification.
Q2. Can I claim a deduction for cash donations exceeding ₹2,000? No, cash donations above ₹2,000 do not qualify for deductions under Section 80G. To claim the benefit, the donation must be made through traceable modes such as cheque, bank transfer, debit/credit card, or UPI. This rule helps ensure transparency and accountability in charitable donations.
Q3. Are donations in kind eligible for deduction? No, contributions made in kind—such as food, clothes, books, or materials—are not eligible for deduction under Section 80G. Only monetary donations made through approved payment methods qualify for tax benefits.
Q4. Can companies claim deductions under Section 80G? Yes, companies can claim deductions under Section 80G for donations made to eligible charitable institutions. The payment must be made through authorised banking channels, and the organization must possess valid 80G registration. Such deductions are treated as business expenses or corporate social responsibility (CSR) contributions in some cases.
Q5. What happens if a donation is made to an unregistered trust? If a donation is made to a trust or organization that is not registered under Section 80G, the donor cannot claim any tax deduction. It is essential to verify the trust’s 80G registration number, validity, and approval status before donating to ensure the contribution qualifies for tax relief.
Q6. Is there any upper limit on claiming deductions under Section 80G? Yes, certain donations have a maximum limit of 10% of the donor’s adjusted gross total income. Donations beyond this limit cannot be claimed as a deduction in the same or future financial years. However, some donations, like those to the Prime Minister’s Relief Fund, are eligible for 100% deduction without any upper cap.
Q7. Can I claim a deduction if my employer donates on my behalf? Yes, if the employer makes a donation on behalf of an employee and the same is reflected in the employee’s Form 16, the deduction can be claimed. The employee must ensure that a donation certificate or receipt from the charitable organisation is provided through the employer to substantiate the claim.
Q8. Do I need to attach donation receipts with my ITR? No, it is not necessary to upload donation receipts while filing the income tax return. However, the receipts should be kept safely for verification if requested by the Income Tax Department later. The receipt must include the donor’s name, PAN, amount donated, registration number, and validity of the 80G certificate.
Q9. Can NRIs claim Section 80G deductions? Yes, NRIs (Non-Resident Indians) can claim deductions under Section 80G for donations made to eligible Indian charitable institutions. The donation must be made from income that is taxable in India, and the payment should be made through recognised banking channels from an Indian account.
Q10. How does Form 10BE help in claiming deductions? Form 10BE is issued by the charitable organisation to confirm that your donation has been received and reported to the Income Tax Department. It contains details like your name, PAN, donation amount, and the trust’s registration number. This form ensures that your deduction appears correctly in your AIS or Form 26AS, preventing any mismatch during ITR filing.
Q11. Are donations made to political parties eligible under Section 80G? No, donations made to political parties are not eligible under Section 80G. These contributions fall under different sections—80GGC for individual taxpayers and 80GGB for companies. Deductions under these sections apply only to contributions made to registered political parties or electoral trusts.
Q12. How can TaxBuddy help with Section 80G deductions? TaxBuddy simplifies the process of claiming Section 80G deductions by automatically identifying eligible donations, validating them against your Form 26AS or AIS, and ensuring accurate reporting in your income tax return. Its expert-assisted and AI-driven filing platform minimises human error, helping you claim the maximum deduction while staying fully compliant with the Income Tax Act.
