Section 80G Donation Mismatch: How TaxBuddy Responds to Income Tax Notices on Donation Claims
- Rashmita Choudhary
- Dec 30, 2025
- 9 min read
Section 80G donation mismatches have become one of the most common reasons for automated income tax notices. With mandatory reporting through Form 10BD by charitable institutions, even genuine donations can be disallowed if the data does not match the taxpayer’s ITR. Missing Form 10BE, incorrect PAN details, invalid registration status of the trust, or wrong reporting under Schedule 80G often trigger notices during processing. These mismatches usually surface through Section 143(1) or related communications. A timely, accurate response backed by proper documentation is critical to protect the deduction and prevent additional tax, interest, or scrutiny.
Table of Contents
What Is a Section 80G Donation Mismatch
A Section 80G donation mismatch occurs when the donation claimed in the income tax return does not match the data reported by the charitable institution to the Income Tax Department. Since FY 2021–22, eligible trusts and NGOs are required to report donation details through Form 10BD, while donors receive Form 10BE as proof. Any difference between the amount claimed in Schedule 80G and the data available with the department is flagged automatically. Even genuine donations can face disallowance if reporting is incomplete, inaccurate, or inconsistent across systems.
Why Section 80G Mismatches Trigger Income Tax Notices
Income tax processing has moved decisively toward automation, with most returns now assessed through system-driven validations rather than manual review. One of the key verification layers involves cross-checking deductions claimed in the income tax return with third-party information available with the tax department. For Section 80G, this comparison happens between the amount reported by the taxpayer in Schedule 80G and the data filed by the charitable institution through Form 10BD. Any gap, even if minor, is immediately flagged by the Centralised Processing Centre during return processing.
These mismatches are not automatically viewed as wrongdoing. In most cases, they are treated as data verification issues. The tax department’s primary objective is to confirm whether the deduction claimed is supported by corresponding disclosures from the donee institution and whether it complies with statutory conditions. Missing Form 10BE, incorrect PAN details, or timing differences in reporting can all lead to a system-generated alert without any adverse presumption about intent.
However, once a mismatch is identified, the system is designed to seek clarification. This is why notices are issued, typically as part of the intimation under Section 143(1) or related communications. These notices provide taxpayers with an opportunity to explain the discrepancy and submit supporting documents. The process is structured and time-bound, with clear deadlines mentioned in the notice.
The risk arises when no response is submitted within the stipulated period or when the explanation provided does not adequately address the mismatch. In such cases, the automated system proceeds with disallowance of the Section 80G deduction. This leads to recomputation of taxable income, resulting in additional tax demand. Depending on the situation, interest may also be levied on the increased liability. What begins as a procedural mismatch can therefore translate into a financial outflow if not handled promptly and correctly.
Automation has increased efficiency, but it has also reduced flexibility. The system works strictly on available data, and any inconsistency left unresolved is treated as an ineligible claim. This makes timely review of notices and accurate documentation essential for taxpayers who wish to retain their Section 80G benefits.
Common Reasons for Section 80G Donation Mismatch
Several practical issues lead to mismatches. Donations may not be reported by the donee in Form 10BD, or the donor may not have received Form 10BE. In some cases, the charitable institution’s 80G registration may not be valid on the date of donation. Claims exceeding the permissible 10 percent of adjusted gross total income for certain funds are also flagged. Cash donations exceeding ₹2,000, missing PAN details, unstamped receipts, or incorrect entries under Schedule 80G further increase the risk of notices.
Types of Income Tax Notices Issued for 80G Claims
Most Section 80G mismatches are communicated through intimation under Section 143(1), highlighting a proposed adjustment. In higher-value cases or repeated inconsistencies, notices under Section 245 for adjustment of refunds may be issued. These communications usually provide a window of 15 to 30 days for response. Ignoring them leads to automatic disallowance of the deduction and recalculation of tax liability.
Is Section 80G Deduction Allowed in the New Tax Regime
Section 80G deduction is not allowed under the new tax regime opted under Section 115BAC. Taxpayers choosing the new regime for the relevant financial year cannot claim deductions for charitable donations, irrespective of documentation or eligibility. This clarification is essential before evaluating any mismatch, as claims made under the new regime are disallowed by design, not due to reporting errors.
How Section 80G Deduction Works in the Old Tax Regime
Under the old tax regime, donations to eligible institutions qualify for deduction at 50 percent or 100 percent, with or without qualifying limits, depending on the category of the donee. Certain donations are capped at 10 percent of adjusted gross total income. Accurate reporting of the donee’s name, PAN, registration number, and donation amount in Schedule 80G is mandatory. Proper alignment with Form 10BD data ensures the deduction is processed without disruption.
Documents Required to Respond to a Section 80G Notice
A complete response requires the donation receipt bearing the donee’s name, PAN, and 80G registration details. Form 10BE issued by the charitable institution is the primary supporting document. Bank statements or payment proofs showing non-cash transactions strengthen the reply. In capped cases, computation sheets demonstrating adherence to the 10 percent limit may also be required. Clear documentation significantly improves the chances of resolution.
How to Reply to a Section 80G Donation Mismatch Notice
The response must be submitted through the incometax e-filing portal within the prescribed timeline. Supporting documents should be uploaded in the specified format, along with a concise explanation addressing the mismatch. If the error is factual and correctable, filing a revised return may be more appropriate than contesting the adjustment. Precision and timeliness are critical, as incomplete replies are often treated as non-compliance.
How TaxBuddy Handles Section 80G Mismatch Notices
TaxBuddy simplifies the entire notice-response journey by validating donation eligibility upfront and ensuring accurate reporting during filing. When a notice is received, documents can be uploaded directly on the platform for expert review. The response is drafted with clear justification, submitted through the portal, and tracked until closure. This structured approach reduces stress, avoids unnecessary reassessment, and often resolves issues at the initial processing stage itself.
When a Revised Return Is Required for 80G Errors
A revised return is appropriate when the mismatch arises due to incorrect data entry, wrong donation amount, or regime selection error. Revising the return before final adjustment helps prevent interest and additional tax demands. However, when the claim is correct and supported by valid documents, a detailed reply to the notice is sufficient without revision.
Consequences of Ignoring Section 80G Mismatch Notices
Ignoring a Section 80G mismatch notice has consequences that extend far beyond the loss of a single deduction. When no response is submitted within the prescribed timeline, the Income Tax Department proceeds with automated processing based on available data. The donation claim is disallowed in full or in part, and the taxable income is recalculated accordingly. This often results in an unexpected tax demand, even when the original donation was genuine and properly paid.
Once the deduction is removed, interest liability begins to accrue. Interest under Section 234A may apply if the additional tax impacts return filing obligations, while Section 234B interest is commonly levied for short payment of advance tax arising from the disallowance. These interest costs continue to accumulate until the demand is settled, increasing the overall financial burden.
Repeated or high-value mismatches also raise risk flags within the system. Cases that show a pattern of unresolved discrepancies may move beyond routine processing into detailed scrutiny. Under scrutiny assessment, the tax officer can call for additional records, explanations, and supporting documents, not limited to the donation claim alone. This widens the scope of review and significantly increases compliance effort and response timelines.
In more serious situations, especially where the department believes the deduction was claimed without proper basis, penalty proceedings may be initiated for under-reporting or misreporting of income. Such penalties can substantially increase the tax payable and may involve extended correspondence with the department. What begins as a correctable documentation issue can therefore escalate into a prolonged compliance challenge.
Proactive handling of Section 80G mismatch notices helps avoid these outcomes. Timely submission of documents, clear explanations, or corrective actions such as filing a revised return protect legitimate tax benefits and prevent unnecessary financial and procedural stress.
Conclusion
Section 80G donation mismatches are procedural issues rooted in data alignment rather than intent. With accurate documentation, timely responses, and informed handling, most notices can be resolved without financial impact. Platforms like TaxBuddy combine automated checks with expert oversight to reduce the likelihood of mismatches and manage notices efficiently when they arise. For anyone seeking reliable support with donation claims or income tax notices, it is advisable to download the TaxBuddy mobile app for a simplified, secure, and hassle-free experience.
FAQs
Q. Does TaxBuddy offer both self-filing and expert-assisted plans for ITR filing, or only expert-assisted options?
TaxBuddy offers both self-filing and expert-assisted plans to suit different tax profiles. Self-filing is designed for individuals with straightforward income and deduction structures, where guided steps, automated checks, and pre-filled data reduce errors. Expert-assisted plans are meant for taxpayers dealing with complex deductions such as Section 80G, multiple income sources, or income tax notices. In such cases, a qualified tax expert reviews the return, verifies documents, and ensures compliance before submission.
Q. Which is the best site to file ITR?
The Income Tax Department’s e-filing portal remains the official platform for filing returns in India. However, many taxpayers prefer assisted platforms that simplify the process. TaxBuddy combines government-authorised filing with automation, validation checks, and expert support. This reduces common errors, improves accuracy in deductions like Section 80G, and provides post-filing assistance if a notice or mismatch arises.
Q. Where to file an income tax return?
Income tax returns can be filed online through the Income Tax Department’s e-filing portal. Alternatively, authorised platforms such as TaxBuddy enable return filing through a secure interface while submitting the data directly to the department. These platforms are often preferred for their ease of use, guided workflows, and integrated support for deductions, revisions, and notices.
Q. What is Form 10BE in relation to Section 80G?
Form 10BE is a donation certificate issued by an eligible charitable institution to the donor. It contains details such as the donor’s PAN, donation amount, mode of payment, and the trust’s 80G registration number. This form is generated based on the trust’s Form 10BD filing and is the primary document used by the tax department to validate Section 80G claims during ITR processing.
Q. How much time is given to respond to a Section 80G notice?
The response timeline typically ranges between 15 and 30 days, depending on the nature of the notice. The exact deadline is mentioned in the communication issued by the tax department. Failure to respond within this period generally results in automatic disallowance of the deduction and recalculation of tax liability.
Q. Are cash donations allowed under Section 80G?
Cash donations exceeding ₹2,000 are not eligible for deduction under Section 80G. Only donations made through banking channels such as cheque, demand draft, UPI, net banking, or debit cards qualify. This restriction exists to ensure traceability and reduce misuse of deductions.
Q. Can Section 80G be claimed without Form 10BD filing by the trust?
If the charitable institution has not filed Form 10BD, the donation will not appear in the tax department’s records. In such cases, the Section 80G claim is likely to be flagged or disallowed, even if the payment is genuine. Coordinating with the trust to ensure timely Form 10BD filing is essential for successful deduction claims.
Q. Is Section 80G deduction available under the new tax regime?
Section 80G deductions are not available under the new tax regime opted under Section 115BAC. Taxpayers choosing this regime cannot claim most deductions, including those for charitable donations. Any 80G claim made under the new regime is disallowed during processing, irrespective of documentation.
Q. What happens if the donation exceeds the eligible limit?
Certain donations under Section 80G are subject to a qualifying limit of 10 percent of adjusted gross total income. If the claimed donation exceeds this limit, the excess amount is disallowed during ITR processing. The deduction is restricted automatically, and only the permissible portion is allowed.
Q. Can a revised return fix an 80G mismatch?
A revised return can correct errors such as incorrect donation amounts, wrong trust details, or incorrect regime selection. If the mismatch arises due to a reporting mistake rather than document deficiency, revising the return before final adjustment helps prevent additional tax demands and interest.
Q. Will ignoring an 80G notice lead to penalties?
Ignoring a Section 80G mismatch notice results in disallowance of the deduction and higher tax payable. Interest under applicable sections may apply, and repeated non-compliance can increase the risk of scrutiny or penalty proceedings for under-reporting or misreporting of income.
Q. How does TaxBuddy reduce future 80G notice risks?
TaxBuddy reduces future notice risks by validating donation eligibility at the filing stage, ensuring correct Schedule 80G reporting, and securely storing Form 10BE and payment proofs. Automated checks combined with expert review help align ITR data with tax department records, significantly lowering the chances of mismatches and subsequent notices.
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