Donation Receipt Rules Under Section 80G for Tax Deduction

Section 80G of the Income Tax Act, 1961 allows taxpayers to claim deductions for donations made to recognized charitable institutions or funds. To ensure transparency and accountability, the Income Tax Department mandates specific receipt rules and compliance conditions before allowing such deductions. These rules help verify the authenticity of donations and prevent misuse of tax benefits. Every donor must adhere to the prescribed documentation format and payment norms to qualify for tax relief under Section 80G.

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Table of Contents

• Eligibility for Deduction Under Section 80G

• Donation Receipt Rules for Claiming Tax Deduction

• Mode of Payment for Eligible Donations

• Understanding Form 10BE and Its Importance

• Deduction Limits Under Section 80G

• Record Keeping and Compliance Requirements

• Latest Updates on Section 80G Donation Compliance

• How TaxBuddy Helps Simplify 80G Tax Deductions

• Conclusion

• FAQs

Eligibility for Deduction Under Section 80G

To claim a deduction under Section 80G, the donation must be made to a charitable institution or fund that is duly registered and approved by the Income Tax Department. Only organizations with a valid and active 80G registration certificate are eligible to issue donation receipts that qualify for tax benefits. Donors can verify the institution’s registration status through the official Income Tax portal to ensure legitimacy. Both individuals and entities such as Hindu Undivided Families (HUFs), firms, and companies are eligible to claim deductions. However, the deduction is available only if the donor opts for the old tax regime, as the new regime under Section 115BAC does not permit most exemptions and deductions, including those under Section 80G.

Donation Receipt Rules for Claiming Tax Deduction

A valid donation receipt is the foundation for claiming a deduction under Section 80G. The receipt serves as proof that the donation was made to an approved charitable organization and must include specific details. These include the name, address, and Permanent Account Number (PAN) of the institution, its 80G registration number along with the validity period, and a unique receipt number with the date of donation. It must also mention the donor’s name, address, PAN, and mode of payment. The amount donated must be clearly stated, whether paid through cheque, digital transfer, or any other banking mode. The receipt must be signed by an authorized representative of the organization. Without these details, the Income Tax Department may reject the deduction claim during assessment.

Mode of Payment for Eligible Donations

To ensure transparency and traceability, only monetary donations made through legal and traceable channels qualify for deduction under Section 80G. Acceptable payment modes include cheque, demand draft, electronic transfer, UPI, or debit/credit card. Cash donations exceeding ₹2,000 are not eligible for tax benefits, as per the amendment made to curb unaccounted cash transactions. Donations in kind, such as clothes, food, or materials, do not qualify for deductions regardless of value. This rule ensures that only legitimate and recorded transactions receive tax benefits, maintaining integrity in the charitable ecosystem.

Understanding Form 10BE and Its Importance

Form 10BE is a mandatory document issued by the charitable institution to confirm receipt of the donation. Starting from FY 2022–23, this form must be provided by the donee institution and uploaded on the Income Tax portal. It contains crucial details such as the donor’s name, PAN, amount donated, and the unique donation reference number. The donor must cross-verify that the details in Form 10BE match the donation receipt before filing their Income Tax Return. The absence of Form 10BE or a mismatch in details may lead to the deduction being disallowed. Institutions that fail to issue Form 10BE on time may also face penalties from the Income Tax Department, affecting both the donor and the organization.

Deduction Limits Under Section 80G

Deductions under Section 80G are categorized into two groups—donations eligible for 100% deduction and those eligible for 50% deduction. Some donations, such as those made to the Prime Minister’s National Relief Fund, National Defence Fund, or PM CARES Fund, qualify for a full 100% deduction without any limit. Others, such as contributions to approved charitable trusts and welfare organizations, qualify for a 50% deduction subject to a ceiling of 10% of the donor’s gross total income. Any donation amount exceeding this limit cannot be carried forward to future years. Understanding these limits helps taxpayers plan their charitable contributions effectively while maximizing tax savings.

Record Keeping and Compliance Requirements

Although donation receipts and Form 10BE are not required to be physically submitted with the Income Tax Return, maintaining them is crucial. Donors must keep these documents safely for at least six years after filing, as the Income Tax Department can request verification during scrutiny. Proper documentation ensures transparency and safeguards against disallowances. Donors should also retain proof of payment, such as bank statements or transaction confirmations, to validate the donation. Institutions are expected to maintain accurate donor records and file the corresponding Form 10BD annually, listing all donations received, to remain compliant with reporting norms.

Latest Updates on Section 80G Donation Compliance

Recent updates from the CBDT emphasize stricter enforcement of donation reporting and digital verification. Institutions are now required to upload donor details and corresponding receipts electronically through Form 10BD, ensuring that donors automatically receive Form 10BE. The shift to digitized verification has minimized errors and improved transparency. Non-compliance by charitable organizations, such as delayed filing of Form 10BD or incorrect donor details, may result in penalties and disqualification of donor claims. Donors are also encouraged to confirm that their chosen institutions file these forms correctly to safeguard their tax benefits.

How TaxBuddy Helps Simplify 80G Tax Deductions

TaxBuddy simplifies the process of claiming deductions under Section 80G through its AI-powered tax filing platform. The platform automatically identifies eligible deductions based on uploaded documents and verifies donation receipts and Form 10BE data. Users can store digital copies of receipts securely and ensure that all compliance requirements are met before filing. For complex cases or high-value donations, TaxBuddy’s expert-assisted filing ensures accuracy and prevents claim rejections. By integrating automation and expert support, TaxBuddy provides a smooth, error-free experience for taxpayers seeking to optimize their charitable deductions and maintain full compliance with Income Tax laws.

Conclusion

Following the donation receipt rules under Section 80G is essential for both donors and institutions to ensure transparency and eligibility for tax deductions. With digital verification, mandatory forms, and strict compliance requirements, claiming these benefits has become more streamlined yet precise. Choosing recognized institutions, retaining proper documentation, and using compliant payment methods safeguard your deduction claims. For anyone looking for assistance in tax filing, it is recommended to download theTaxBuddy mobile app for a simplified, secure, and hassle-free experience.

FAQs

Q1. 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 designed to suit different types of taxpayers. The self-filing plan is ideal for individuals who prefer to manage their own tax filing with digital assistance. It uses an AI-powered system that pre-fills data, performs real-time error checks, and provides deduction recommendations. For those who prefer professional guidance, the expert-assisted plan allows a certified tax professional to review, prepare, and file the return on the taxpayer’s behalf. This ensures maximum accuracy and compliance, especially for complex cases like capital gains, business income, or foreign income.

Q2. Which is the best site to file ITR? The Income Tax Department’s e-filing portal (incometax.gov.in) is the official platform for filing returns in India. However, for a more user-friendly experience, platforms like TaxBuddy are preferred by many taxpayers. TaxBuddy combines automation, AI-driven form prefill, and expert validation, eliminating manual errors and confusion. It simplifies complex tax calculations, assists in claiming deductions like those under Section 80G, and ensures compliance with the latest Income Tax Act provisions. For individuals seeking convenience and professional accuracy, TaxBuddy stands out as one of the most efficient tax-filing platforms in India.

Q3. Where to file an income tax return? An income tax return can be filed either through the government’s official e-filing portal or through authorized tax-filing platforms like TaxBuddy. While the official portal requires manual data entry and document uploads, TaxBuddy offers an integrated solution where users can upload Form 16 or other relevant documents, and the platform auto-fills the required fields. It also validates the details with AIS/TIS and Form 26AS to avoid mismatches. TaxBuddy further assists with post-filing support, helping users in case of notice or rectification requirements, making it a complete tax solution for salaried individuals and businesses.

Q4. Can I claim tax deduction without an 80G receipt? No, a valid donation receipt is mandatory to claim a deduction under Section 80G of the Income Tax Act. The receipt must be issued by an institution approved under Section 80G and should contain essential details such as the name, address, PAN of the institution, registration number, donation amount, date, and payment mode. Without this official receipt, the Income Tax Department may reject the deduction claim during verification or assessment. TaxBuddy helps ensure all mandatory receipt details are correctly captured and matched with Form 10BE before filing.

Q5. Are donations in kind eligible for Section 80G deduction? No, donations made in kind—such as food, clothing, or materials—are not eligible for deductions under Section 80G. The Income Tax Act allows deductions only for monetary donations made through traceable modes such as cheque, bank transfer, or UPI. This rule ensures transparency and accountability in charitable contributions. To claim the benefit, donors must provide proof of payment and an official receipt from the registered organization. TaxBuddy assists users in identifying which donations qualify for tax benefits and guides them on how to record these properly in their tax returns.

Q6. Is Form 10BE required for all donations under Section 80G? Yes, Form 10BE is mandatory for all donations made under Section 80G starting from the financial year 2022–23. It is issued by the charitable organization to confirm that the donation was received and reported correctly to the Income Tax Department. The form includes details like the donor’s name, PAN, donation amount, and unique acknowledgment number. The donor must ensure that the Form 10BE details match the receipt information when filing the return. TaxBuddy’s platform automatically verifies these details during the filing process to avoid claim rejection due to data mismatches.

Q7. What happens if my donation receipt and Form 10BE details mismatch? If there is a discrepancy between the donation receipt and the information in Form 10BE, the Income Tax Department may disallow the deduction claim. Mismatches can occur due to incorrect donor details, errors in PAN, or discrepancies in the donation amount. In such cases, the donor should immediately contact the charitable institution to correct the errors and obtain a revised Form 10BE. Filing the ITR with incorrect details can trigger a notice under Section 139(9) or adjustment under Section 143(1)(a). TaxBuddy ensures such mismatches are identified early and resolved before submission.

Q8. Can companies and HUFs claim deductions under Section 80G? Yes, companies, Hindu Undivided Families (HUFs), and other entities can claim deductions under Section 80G for eligible donations. The donation must be made to an approved charitable organization or fund and through a traceable mode of payment. The deduction rules, including the 50% or 100% claim limits, apply similarly to companies and HUFs as they do to individuals. However, donations made in the course of business can sometimes be claimed as business expenses under Section 37(1) instead of Section 80G. TaxBuddy’s experts can help determine the best approach based on the nature of the donation.

Q9. What is the maximum deduction limit under Section 80G? The maximum deduction available under Section 80G depends on the type of institution to which the donation is made. Donations to certain funds such as the Prime Minister’s National Relief Fund or PM CARES Fund qualify for 100% deduction without any limit. Donations to other specified funds and institutions qualify for 50% deduction subject to a ceiling of 10% of the donor’s gross total income. Any amount exceeding this limit cannot be carried forward to future years. TaxBuddy’s platform automatically computes these limits based on the taxpayer’s income and donation details, ensuring accurate deduction claims.

Q10. Are donations made in cash eligible for Section 80G benefits? Only cash donations up to ₹2,000 are eligible for deduction under Section 80G. Any cash donation exceeding this amount is not eligible for tax benefits, regardless of the recipient institution’s eligibility. This restriction was introduced to curb the misuse of cash transactions and promote digital transparency. Donors are encouraged to use cheque, bank transfer, or UPI to ensure traceability. TaxBuddy’s AI-driven interface verifies the mode of payment during filing to ensure that ineligible cash donations are not mistakenly claimed, thus preventing potential disallowances or penalties.

Q11. How can I verify whether an organization has valid 80G registration? To verify whether a charitable institution has a valid 80G registration, taxpayers can visit the official Income Tax Department portal and use the “List of Approved Institutions” or “Charitable Trusts” search feature. By entering the institution’s name, PAN, or registration number, donors can confirm its current registration status and validity period. Only institutions with active registration are eligible to issue valid donation receipts under Section 80G. TaxBuddy provides in-app assistance for checking an organization’s registration before filing, ensuring that deductions are claimed only from approved entities.

Q12. Does TaxBuddy help with claiming 80G deductions? Yes, TaxBuddy offers complete assistance for claiming deductions under Section 80G. The platform helps users upload and validate donation receipts, match details with Form 10BE, and ensure that all mandatory information is correctly filled in the ITR. Its automated system checks eligibility, calculates deduction limits, and flags any potential errors before submission. For donors contributing to multiple institutions, TaxBuddy’s expert-assisted plan helps categorize each donation under the correct deduction type—50% or 100%—and ensures full compliance with the Income Tax Act. This makes the process of claiming 80G deductions smooth, reliable, and stress-free.