Section 80G and 80GGA

What is Section 80G?

Section 80G of the Income Tax Act, 1961, offers tax deductions to individuals and organizations donating to specified charitable institutions and relief funds. This provision encourages philanthropy by reducing the donor’s taxable income.

Eligibility for Section 80G Deduction

Any taxpayer—individuals, Hindu Undivided Families (HUFs), companies, firms, or Non-Resident Indians (NRIs)—can claim deductions under Section 80G, provided the donations are made to approved institutions.

Deduction Categories under Section 80G

Donations eligible under Section 80G are categorized based on the percentage of deduction and qualifying limits:

1. 100% Deduction Without Qualifying Limit

• National Defence Fund
• Prime Minister’s National Relief Fund
• PM CARES Fund
• National Children’s Fund
• National Cultural Fund
• Swachh Bharat Kosh
• Clean Ganga Fund
• National Fund for Control of Drug Abuse
• Chief Minister’s Relief Fund or Lieutenant Governor’s Relief Fund
• Army Central Welfare Fund, Indian Naval Benevolent Fund, Air Force Central Welfare Fund
• National Illness Assistance Fund
• National Blood Transfusion Council or State Blood Transfusion Council
• Fund set up by a State Government for medical relief to the poor
• National Foundation for Communal Harmony
• Fund for Technology Development and Application
• Zila Saksharta Samiti
• An approved university/educational institution of national eminence
• Prime Minister’s Armenia Earthquake Relief Fund
• Africa (Public Contributions – India) Fund

2. 50% Deduction Without Qualifying Limit

• Prime Minister’s Drought Relief Fund
• Jawaharlal Nehru Memorial Fund
• Indira Gandhi Memorial Trust
• Rajiv Gandhi Foundation
• Donations for renovation or repair of notified temples, mosques, gurudwaras, churches, or other places of worship

3. 100% Deduction Subject to 10% of Adjusted Gross Total Income

• Donations to the government or any approved local authority, institution, or association to promote family planning
• Donations by companies to the Indian Olympic Association or other notified associations for developing sports infrastructure or sponsoring sports in India

4. 50% Deduction Subject to 10% of Adjusted Gross Total Income

• Donations to other approved charitable institutions not covered above

How to Claim Section 80G Deduction

1. Obtain a Receipt: Ensure the donation receipt includes the name, address, PAN of the donee, amount donated, and the registration number under Section 80G.
2. Mode of Payment: Donations exceeding ₹2,000 must be made through non-cash modes like cheque, draft, or electronic transfer to qualify for deduction.
3. Calculate Adjusted Gross Total Income (AGTI):
   • AGTI = Gross Total Income – (Exempt income + Long-term capital gains + Short-term capital gains under Section 111A + Deductions under Sections 80C to 80U, excluding 80G)
4. Apply Qualifying Limit:
   • For donations under categories 3 and 4, the deduction is limited to 10% of AGTI.
5. File Income Tax Return (ITR): While filing your ITR, enter the deduction amount under the appropriate section.

What is Section 80GGA?

Section 80GGA provides tax deductions for donations made towards scientific research and rural development. This section is aimed at encouraging contributions to national development projects.

Eligibility for Section 80GGA Deduction

• Applicable to all taxpayers except those with income (or loss) from business or profession.

Deduction Details under Section 80GGA

• Deduction Amount: 100% of the donated amount.
• Qualifying Limit: No upper limit on the deduction amount.
• Mode of Payment: Donations exceeding ₹10,000 must be made through non-cash modes.

How to Claim Section 80GGA Deduction

1. Obtain a Receipt: Ensure the donation receipt includes the name, address, PAN of the donee, amount donated, and the registration number under Section 80GGA.
2. Mode of Payment: Donations exceeding ₹10,000 must be made through non-cash modes like cheque, draft, or electronic transfer.
3. File Income Tax Return (ITR): While filing your ITR, enter the deduction amount under the appropriate section.

Key Takeaways

• Sections 80G and 80GGA offer significant tax benefits for donations made to specified institutions and funds.
• Ensure donations are made to approved institutions and through acceptable payment modes to qualify for deductions.
• Maintain proper documentation, including receipts with necessary details, to support your claim.
• These deductions are available only under the old tax regime.

By understanding and utilizing Sections 80G and 80GGA, taxpayers can contribute to societal development while also benefiting from tax deductions.