Section 80G Donations: How to Report Them Correctly in Your ITR and Avoid Tax Notices

Section 80G of the Income Tax Act is one of the key provisions for taxpayers looking to claim deductions on donations made to eligible charitable organizations. This section allows individuals to reduce their taxable income by donating to specified institutions that fall under the purview of this section. The donations can be made to organizations involved in charitable activities, such as NGOs, educational institutions, and institutions focused on relief and development. These donations not only benefit the recipients but also help taxpayers save on taxes, making them an attractive option for philanthropic individuals.

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Table of Contents:

What Is Section 80G?

How to Report Section 80G Donations in Your ITR

How to File Revised Returns for Missed Section 80G or 80E Deductions

How to Avoid Tax Notices for Section 80G Claims

Conclusion

FAQs

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What Is Section 80G?

Section 80G of the Income Tax Act provides a tax deduction for donations made to approved charitable organizations, ensuring that taxpayers who contribute to charity can benefit from tax savings. The deduction allows taxpayers to reduce their taxable income by the amount donated to registered charities or NGOs, as long as the donation qualifies under the criteria set by the Income Tax Department.

The key eligibility factors for donations under Section 80G are as follows:

• Donations must be made to registered and eligible organizations recognized by the Income Tax Department.
  

• Certain donations are eligible for a 100% deduction, while others are eligible for a 50% deduction, depending on the institution’s approval status.
  

• Some donations are subject to conditions like the percentage of income limit, ensuring they don’t exceed a certain threshold of taxable income.

Examples of institutions eligible for Section 80G deductions include those involved in education, healthcare, and environmental conservation.

How to Report Section 80G Donations in Your ITR

To claim the benefits of Section 80G, it’s essential to properly report your donations in the Income Tax Return (ITR). Here's how you can report Section 80G donations:

• Determine the Amount of Donation: First, you need to identify the total amount of donation made to eligible organizations. This can include both cash and non-cash donations, provided they meet the requirements of Section 80G.
  

• Select the Appropriate ITR Form: For individuals and HUFs, the most commonly used form is ITR-1 or ITR-2, depending on the complexity of your income. If you have income from business or profession, ITR-3 or ITR-4 will be applicable. Ensure you select the correct form to report your donations.
  

• Provide Details of Donations: In the ITR form, under the section for deductions, you will need to enter the amount donated and the details of the recipient organizations. The relevant section is usually under “Deductions under Chapter VI-A,” specifically in Section 80G.
  

• Attach Supporting Documentation: Ensure that you have all supporting documents, such as receipts from the charity, and any other proof of the donation, as they may be required if the tax department asks for verification.
  

• Claim the Deduction: After filling in the donation details, the deduction will be automatically reflected in your taxable income. This will reduce the amount of income that is subject to tax, potentially lowering your overall tax liability.

It is important to note that some donations, especially in cash, may have limits to how much you can claim, so make sure to check the eligibility and conditions before reporting them.

How to File Revised Returns for Missed Section 80G or 80E Deductions

If you have missed claiming deductions under Section 80G or 80E in your original ITR filing, you still have the opportunity to make corrections. The Income Tax Act allows taxpayers to file a revised return if deductions were omitted or missed in the initial filing.

Here’s how you can file a revised return for missed Section 80G or 80E deductions:

• Identify the Mistake: Review your original ITR filing and identify the missed deduction under Section 80G or 80E. For instance, if you forgot to report a charitable donation or educational loan repayment, these can be claimed through a revised return.
  

• Login to the E-filing Portal: Visit the Income Tax Department’s e-filing portal and log in using your credentials.
  

• Select ‘Revised Return’ Option: Once logged in, select the option to file a revised return. You’ll need to mention the original return filing date and acknowledgment number in the revised return form.
  

• Fill in the Missing Details: In the revised ITR, enter the correct amount of Section 80G donations and any other missed deductions (such as Section 80E). Be sure to update the required fields with the correct information.
  

• Re-submit the Return: After completing the revised return, validate the information, and submit it. The revised return should be filed before the end of the relevant assessment year.
  

• Track the Status: You can track the status of your revised return through the Income Tax portal. The refund or reduced tax liability will be processed accordingly after the corrections.

Filing a revised return for missed deductions is a straightforward process, but it’s important to ensure that all necessary documents are available to support the corrections.

How to Avoid Tax Notices for Section 80G Claims

While claiming Section 80G deductions can reduce your taxable income, it is important to follow the correct procedure to avoid tax notices from the authorities. Here are a few tips to ensure that you don’t receive a notice for your Section 80G claims:

• Ensure Donation to Eligible Organizations: Only donate to organizations that are approved by the Income Tax Department. Donations made to ineligible institutions or unregistered charities may not qualify for a deduction.
  

• Obtain Proper Receipts: Always ensure that you get a proper receipt for your donations, which includes the organization’s name, registration number, date, and amount donated. This documentation will be necessary in case the tax authorities ask for verification.
  

• Avoid Cash Donations Beyond Limits: For cash donations, the maximum deductible amount is limited to ₹2,000. Donations exceeding this limit in cash will not be eligible for deduction.
  

• Report Correctly in the ITR: Accurately report the donation amount and provide all necessary details in the ITR form. Avoid any discrepancies between the claim and the supporting documents.
  

• Keep Track of Limits: Certain organizations may offer only a partial deduction of the donated amount (50% or 100%). Ensure you are claiming the correct percentage as per the organization’s eligibility.

By maintaining proper records and following the prescribed guidelines, you can minimize the chances of receiving a tax notice for Section 80G claims.

Conclusion

Correct reporting of Section 80G donations is crucial to avoid tax notices and to maximize the deductions. To simplify tax filing and ensure accuracy, consider using the TaxBuddy mobile app for a secure, seamless filing experience. Download the TaxBuddy mobile app for hassle-free tax filing and expert assistance.

FAQs

Q1. Does TaxBuddy offer both self-filing and expert-assisted plans for ITR filing, or only expert-assisted options?

Yes, TaxBuddy offers both self-filing and expert-assisted plans for ITR filing. The self-filing plan is designed for taxpayers who are familiar with the tax filing process and prefer to file their returns independently. It provides access to the necessary tools and guidance to help you complete the filing. On the other hand, the expert-assisted plan is ideal for those who require professional help to ensure their returns are accurate, compliant, and optimized for maximum tax benefits. TaxBuddy's expert team assists with all aspects of the filing process, from document verification to TDS credit reconciliation, making sure you avoid errors and meet all regulatory requirements.

Q2. Which is the best site to file ITR?

The best site to file your ITR depends on your specific needs and comfort level with the process. The official Income Tax Department portal offers a direct way to file your returns. However, for a more streamlined and user-friendly experience, platforms like TaxBuddy are highly recommended. TaxBuddy provides an easy-to-use interface, step-by-step guidance, and expert assistance if needed, making it a popular choice for both individuals and businesses. It also offers features like AI-driven tax filing, TDS credit verification, and automatic error checking, ensuring a smoother filing process.

Q3. Where to file an income tax return?

You can file your Income Tax Return (ITR) through the official Income Tax Department portal atincometax.gov.in or use third-party platforms like TaxBuddy for a more simplified process. TaxBuddy offers a user-friendly experience with additional tools, expert assistance, and a secure platform for filing returns. Filing through TaxBuddy can save you time and ensure compliance, especially for those unfamiliar with the complexities of tax filings.

Q4. Can I claim 80G deduction for donations made in cash?

Under Section 80G of the Income Tax Act, donations made in cash are eligible for deduction, but there are certain limits. If you make a donation of more than ₹2,000 in cash, it will not be eligible for deduction. Donations made in cash up to ₹2,000 can be claimed under Section 80G, but it's important to maintain the necessary documentation, such as the receipt from the charity. For larger donations, it is recommended to make the payment via cheque, bank transfer, or other traceable methods to ensure full eligibility for deductions.

Q5. What details are required in the ITR for claiming 80G deduction?

To claim a deduction under Section 80G for donations, the following details are required:

• Donor’s Name: Ensure the name of the donor is mentioned correctly.

• PAN Number: The PAN of the donor should be provided to claim the deduction.

• Charity Details: The name, address, and registration number of the charity or trust to which the donation was made.

• Amount of Donation: The exact amount donated should be specified, along with any receipts or proof of payment.

• Receipt Details: Ensure that the charity has issued a receipt mentioning the amount donated, the charity’s registration number, and the date of donation.

Q6. What if I forgot to claim 80G in my original ITR?

If you forgot to claim the 80G deduction in your original ITR, you can file a revised return. The Income Tax Act allows taxpayers to file a revised return under Section 139(5) of the Income Tax Act within the assessment year. This revised return must include the 80G deduction and any other relevant details missed initially. The revised return should be filed after carefully reviewing your documents, ensuring that all necessary information is provided correctly to avoid any future complications.

Q7. Are all donations eligible for 100% deduction?

No, not all donations are eligible for a 100% deduction under Section 80G. Donations to certain charitable organizations are eligible for 100% deduction, while others qualify for a 50% deduction. The eligibility depends on the organization receiving the donation and its registration status. Donations made to national funds like the PM Relief Fund or certain government-approved institutions are typically eligible for 100% deduction. For other donations, you may be eligible for 50% of the donated amount as a deduction. Always check the organization's registration status to verify eligibility for the full deduction.

Q8. What documents should I keep to avoid tax notices?

To avoid receiving tax notices, it’s essential to maintain proper documentation for all deductions and claims made in your ITR. These documents include:

• Form 16 or Salary Slips: To verify your income and TDS details.

• Bank Statements: To support income from interest and other sources.

• Investment Proofs: For claims under Section 80C, 80D, etc.

• Receipts for Donations (Section 80G): For claiming deductions on charitable donations.

• TDS Certificates: For verification of TDS claims made by your employer or financial institutions.

• Capital Gains Documents: For any property sales or investment income claims.

Ensuring that all your documentation is accurate and up-to-date can help you avoid unnecessary scrutiny and notices from the tax department.

Q9. How do I check if a donation qualifies for 80G deductions?

To check if a donation qualifies for 80G deductions, you can verify the status of the charity or trust by looking for their registration number under Section 80G. Charities must be registered with the Income Tax Department to qualify for deductions. Additionally, ensure that the charity provides a valid receipt with the required details, such as the registration number, donor’s name, amount donated, and the date of donation. The Income Tax Department’s official website also maintains a list of approved institutions eligible for 80G deductions.

Q10. What should I do if I donated to an unregistered charity?

If you donated to an unregistered charity, the donation will not be eligible for a deduction under Section 80G, as only donations to registered charitable organizations qualify for this deduction. In such cases, it is advisable to ensure that any future donations are made to government-approved or registered charities that can provide a valid receipt with the necessary details. To support your donation, ensure that all donations are made through traceable methods like cheques, bank transfers, or online payments.

Q11. Can I claim Section 80G deductions for international donations?

Donations made to foreign charities are generally not eligible for Section 80G deductions, as the provision only applies to donations made to organizations that are registered in India. However, certain international organizations that have a specific tie-up with the government of India may be eligible for deductions. To be sure, always check the specific organization’s status with the Income Tax Department and verify their eligibility under Section 80G before claiming the deduction.

Q12. How do I file a revised return for missed deductions under Section 80G?

If you missed claiming a deduction under Section 80G in your original return, you can file a revised return under Section 139(5) of the Income Tax Act. To do so:

• Log in to your e-filing account on the Income Tax Department portal or use a third-party platform like TaxBuddy.

• Select the option to file a revised return and provide the necessary corrections.

• Include the missing 80G donation details in the revised return, ensuring that you have all the supporting documents like receipts and proof of payment.

• Submit the revised return before the assessment year ends to avoid penalties and ensure you benefit from the missed deduction.