Can I claim Section 80G deductions under the new tax regime?

Section 80G deductions are available only if you opt for the old tax regime. Under the new tax regime, taxpayers are not allowed to claim any deductions, including those under Section 80G. If you wish to claim tax benefits for donations made to eligible charitable institutions, you must choose the old tax regime when filing your ITR.

What if I donate in cash above ₹2,000?

Cash donations exceeding ₹2,000 are not eligible for Section 80G deductions. To ensure your donation qualifies for tax benefits, you must make payments via non-cash methods such as cheque, bank transfer, or online payments. The Income Tax Department specifically excludes cash donations above ₹2,000 to prevent unaccounted and undocumented transactions.

How do I verify if a charity is eligible for 80G deductions?

To verify if a charity qualifies for Section 80G deductions, you must check the charity's Section 80G registration number. This number should be clearly mentioned on the receipt issued by the charity. You can cross-check this number on the official Income Tax Department's website to ensure the charity’s registration is valid. Donations to only registered organizations are eligible for deductions.

What documents do I need for claiming Section 80G deductions?

To claim Section 80G deductions, you must have a valid donation receipt from the charity. The receipt should include: the name, address, and PAN of the donee (the charity); the amount donated; the charity’s 80G registration number. In some cases, if you are claiming a 100% deduction, Form 58A from the charity is required. Always ensure the receipt is properly stamped and signed by the charity for authenticity.

Can I claim 80G deductions if I have business income?

Yes, you can claim Section 80G deductions even if you have business income. The eligibility for claiming the deduction is not restricted based on the source of your income. However, you must opt for the old tax regime when filing your ITR to avail of the deductions under Section 80G. If you choose the new tax regime, you will not be able to claim any deductions, including those under Section 80G.

What is the maximum deduction under Section 80G?

The maximum deduction available under Section 80G depends on the category of the charity you donate to. If the charity qualifies for a 100% deduction, there is no upper limit on the deduction. However, if the charity qualifies for only a 50% deduction, and it falls under the category with a qualifying limit, the deduction is capped at 10% of your adjusted gross total income (AGTI). For donations falling under limits, ensure to check the specific rules for the applicable deduction category.

Can I donate goods or services for 80G deductions?

No, donations of goods or services (in-kind donations) do not qualify for Section 80G deductions. Only monetary donations, including cash, cheque, bank transfer, or online payments, are eligible for deductions. If you wish to claim deductions, make sure to donate cash or through electronic modes of payment.

How does TaxBuddy assist with Section 80G claims?

TaxBuddy simplifies the process of claiming Section 80G deductions by helping you track your donations and store necessary documentation. The platform provides an easy-to-use interface where you can enter your donation details and keep all receipts and supporting documents in one place. TaxBuddy also ensures that your Section 80G claims are accurately reported in your ITR, reducing the chances of errors and penalties.

How do I claim deductions for donations made to foreign charities?

Donations made to foreign charities generally do not qualify for Section 80G deductions unless the charity is registered under Section 80G of the Income Tax Act. You need to verify that the charity is a recognized institution in India with a valid 80G registration. If the charity is not registered in India, the donation will not be eligible for tax benefits under Section 80G.

What happens if I lose my donation receipt?

If you lose your donation receipt, your claim for Section 80G deductions may be disallowed, as a valid receipt is required for the deduction. It is essential to keep your donation receipts safe for future reference and filing purposes. If you lose the receipt, you should contact the charity and request a duplicate receipt, ensuring that all necessary details are included.

Can I donate through online platforms and claim 80G deductions?

Yes, donations made through online platforms can be eligible for Section 80G deductions, provided they meet the eligibility criteria. The platform must be associated with a charity that is registered under Section 80G, and the donation should be made through an eligible non-cash mode such as credit/debit cards, net banking, or e-wallets. Ensure that you receive a valid receipt from the charity for the donation made.

Maximize Tax Benefits with Section 80G Donations in Your ITR Filing

Dipali Waghmode
Jun 2
8 min read

Section 80G of the Income Tax Act, 1961, offers taxpayers a valuable opportunity to reduce their taxable income by claiming deductions for donations made to charitable institutions and funds. However, to fully maximize these benefits and avoid penalties, it’s essential to follow specific guidelines regarding eligible donations, required documentation, and the correct filing process. Let us explore how to make the most of Section 80G donations in your ITR filing, ensuring you not only receive the tax deductions you are entitled to but also avoid common mistakes that could lead to penalties or scrutiny.

What is Section 80G Donation?
How Section 80G Reduces Your Tax Liability
Eligibility for Section 80G Deductions
Types of Donations Under Section 80G
How to Claim Section 80G Deductions in Your ITR
Common Mistakes to Avoid When Claiming Section 80G Deductions
How TaxBuddy Helps You Maximize Tax Benefits with Section 80G Donations
Conclusion
FAQs

What is Section 80G Donation?

Section 80G allows individuals and organizations to claim deductions for donations made to certain charitable organizations, funds, or institutions recognized by the Income Tax Department. These donations can significantly lower your taxable income, resulting in reduced tax liability. The amount of deduction can be either 50% or 100% of the donation amount, depending on the type of recipient organization. The key to benefiting from this section is ensuring that the donations are made to eligible institutions and that proper documentation is maintained to back the claims.

How Section 80G Reduces Your Tax Liability

Section 80G directly reduces your taxable income by allowing you to claim deductions on the amount donated to registered charitable institutions. These deductions can be either 50% or 100% of the donated amount, depending on the eligibility criteria of the donee organization. By claiming these deductions, you reduce the amount of income that is taxable, which in turn decreases the amount of tax you need to pay. The reduction in taxable income leads to a lower overall tax liability, making charitable donations an effective way to save on taxes while contributing to a cause.

Eligibility for Section 80G Deductions

Not all donations qualify for deductions under Section 80G, so it’s crucial to donate to the right organizations. The following criteria determine eligibility:

Who Can Claim: Individuals, Hindu Undivided Families (HUFs), firms, companies, and even Non-Resident Indians (NRIs) can claim deductions under Section 80G.
Eligible Donations: Only donations made to charitable organizations that are registered under Section 80G qualify for deductions. These organizations must have a valid registration number and meet the criteria set by the Income Tax Department.
Tax Regime: Section 80G deductions are available only for taxpayers opting for the old tax regime. If you opt for the new tax regime, you cannot claim these deductions.

Types of Donations Under Section 80G

Donations under Section 80G are divided into several categories based on the nature of the recipient organization and the amount donated. Here’s how they are categorized:

Category 1: 100% deduction with no limit (e.g., donations to the Prime Minister's Relief Fund).
Category 2: 50% deduction with no limit (e.g., donations to registered NGOs).
Category 3: 100% deduction with a limit of 10% of adjusted gross total income (AGTI).
Category 4: 50% deduction with a limit of 10% of AGTI.

For donations that fall into Categories 3 and 4, the deduction is subject to a cap of 10% of your AGTI. It's essential to ensure that you are aware of which category your donation falls into, as this will affect the amount of the deduction you can claim.

How to Claim Section 80G Deductions in Your ITR

To claim deductions under Section 80G, follow these steps when filing your ITR:

Ensure Eligibility: Confirm that the organization to which you’ve donated is registered under Section 80G.
Obtain Proper Documentation: Ensure you have a donation receipt that includes the name, PAN, and address of the donee organization, the donation amount, and the 80G registration number. For certain donations, Form 58A is also required.
Fill in the Correct Details: In your ITR, enter the donation details in the “Schedule 80G” section. This includes the name, address, PAN of the donee, and the amount donated.
Cross-check Details: Verify that the donation details match the information available in Form 26AS and AIS to avoid discrepancies that could trigger scrutiny.
Keep the Documentation Safe: Retain the donation receipts and supporting documents for future reference in case the tax authorities ask for them.

Common Mistakes to Avoid When Claiming Section 80G Deductions

To ensure that your Section 80G claim is not rejected, avoid these common mistakes:

Donating in Cash Above ₹2,000: Cash donations exceeding ₹2,000 are not eligible for deductions. Donations should be made through non-cash methods like cheque, bank transfer, or online payment.
Missing Donation Receipt: Failing to obtain a valid receipt with all necessary details (including the donee’s PAN and registration number) can lead to the disallowance of your claim.
Incorrect Category of Donation: Not all donations qualify for a 100% deduction. Ensure that you know which category your donation falls into.
Inflating Donation Amounts: Only claim deductions for the actual amount donated. Inflating donation amounts could lead to penalties and legal action.

How TaxBuddy Helps You Maximize Tax Benefits with Section 80G Donations

TaxBuddy is an ideal platform to help you efficiently manage and claim Section 80G deductions. Here’s how:

Track Donations: TaxBuddy helps you monitor all eligible donations, ensuring you don’t miss out on any potential deductions.
Store Documentation: The platform allows you to securely store donation receipts and relevant documents for easy access during your ITR filing.
Guided Filing: TaxBuddy’s user-friendly interface guides you step-by-step through the ITR filing process, ensuring that all Section 80G claims are accurately reported.
Maximized Deductions: With TaxBuddy, you can optimize your tax benefits by ensuring that all donations are correctly categorized and that eligible donations are maximized.

Conclusion

Section 80G offers a valuable opportunity to reduce your tax liability while contributing to charitable causes. By following the correct procedures—donating to eligible institutions, obtaining proper documentation, and filing your ITR accurately—you can maximize your tax benefits and avoid potential penalties. For anyone looking for assistance in tax filing, I highly recommend you download the TaxBuddy mobile app for a simplified, secure, and hassle-free experience.

Frequently Asked Question (FAQs)

Can I claim Section 80G deductions under the new tax regime?
Section 80G deductions are available only if you opt for the old tax regime. Under the new tax regime, taxpayers are not allowed to claim any deductions, including those under Section 80G. If you wish to claim tax benefits for donations made to eligible charitable institutions, you must choose the old tax regime when filing your ITR.
What if I donate in cash above ₹2,000?
Cash donations exceeding ₹2,000 are not eligible for Section 80G deductions. To ensure your donation qualifies for tax benefits, you must make payments via non-cash methods such as cheque, bank transfer, or online payments. The Income Tax Department specifically excludes cash donations above ₹2,000 to prevent unaccounted and undocumented transactions.
How do I verify if a charity is eligible for 80G deductions?
To verify if a charity qualifies for Section 80G deductions, you must check the charity's Section 80G registration number. This number should be clearly mentioned on the receipt issued by the charity. You can cross-check this number on the official Income Tax Department's website to ensure the charity’s registration is valid. Donations to only registered organizations are eligible for deductions.
What documents do I need for claiming Section 80G deductions?
To claim Section 80G deductions, you must have a valid donation receipt from the charity. The receipt should include:
- The name, address, and PAN of the donee (the charity).
- The amount donated.
- The charity’s 80G registration number.
- In some cases, if you are claiming a 100% deduction, Form 58A from the charity is required.

Always ensure the receipt is properly stamped and signed by the charity for authenticity.

Can I claim 80G deductions if I have business income?
Yes, you can claim Section 80G deductions even if you have business income. The eligibility for claiming the deduction is not restricted based on the source of your income. However, you must opt for the old tax regime when filing your ITR to avail of the deductions under Section 80G. If you choose the new tax regime, you will not be able to claim any deductions, including those under Section 80G.
What is the maximum deduction under Section 80G?
The maximum deduction available under Section 80G depends on the category of the charity you donate to. If the charity qualifies for a 100% deduction, there is no upper limit on the deduction. However, if the charity qualifies for only a 50% deduction, and it falls under the category with a qualifying limit, the deduction is capped at 10% of your adjusted gross total income (AGTI). For donations falling under limits, ensure to check the specific rules for the applicable deduction category.
Can I donate goods or services for 80G deductions?
No, donations of goods or services (in-kind donations) do not qualify for Section 80G deductions. Only monetary donations, including cash, cheque, bank transfer, or online payments, are eligible for deductions. If you wish to claim deductions, make sure to donate cash or through electronic modes of payment.
How does TaxBuddy assist with Section 80G claims?
TaxBuddy simplifies the process of claiming Section 80G deductions by helping you track your donations and store necessary documentation. The platform provides an easy-to-use interface where you can enter your donation details and keep all receipts and supporting documents in one place. TaxBuddy also ensures that your Section 80G claims are accurately reported in your ITR, reducing the chances of errors and penalties.
How do I claim deductions for donations made to foreign charities?
Donations made to foreign charities generally do not qualify for Section 80G deductions unless the charity is registered under Section 80G of the Income Tax Act. You need to verify that the charity is a recognized institution in India with a valid 80G registration. If the charity is not registered in India, the donation will not be eligible for tax benefits under Section 80G.
What happens if I lose my donation receipt?
If you lose your donation receipt, your claim for Section 80G deductions may be disallowed, as a valid receipt is required for the deduction. It is essential to keep your donation receipts safe for future reference and filing purposes. If you lose the receipt, you should contact the charity and request a duplicate receipt, ensuring that all necessary details are included.
Can I donate through online platforms and claim 80G deductions?
Yes, donations made through online platforms can be eligible for Section 80G deductions, provided they meet the eligibility criteria. The platform must be associated with a charity that is registered under Section 80G, and the donation should be made through an eligible non-cash mode such as credit/debit cards, net banking, or e-wallets. Ensure that you receive a valid receipt from the charity for the donation made.
How do I check if my donation qualifies for 100% deduction?

To determine if your donation qualifies for a 100% deduction under Section 80G, check the registration details of the recipient organization. The charity should be registered under Section 80G and must fall under a category that allows a 100% deduction. Refer to the receipt you receive from the charity, which will specify whether the donation is eligible for 100% or 50% deduction. You can also verify the charity’s eligibility by cross-checking its registration number on the official Income Tax Department website.