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Deduction-under-Section-80G-for-Donation

 

Deduction under Section 80G for Donation

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Introduction-

Deduction under section 80G for donations to certain notified funds, charitable institutions or other institutions/ funds set up by the Government of India.  In cases where employees make donations to the Prime Minister‘s National Relief Fund, the Chief Minister‘s Relief Fund or the Lieutenant Governor‘s Relief Fund through their respective employers, it is not possible for such funds to issue separate certificate to every such employee in respect of donations made to such funds as contributions made to these funds are in the form of a consolidated cheque. An employee who makes donations towards these funds is eligible to claim deduction under section 80G. It is, hereby, clarified that the claim in respect of such donations as indicated above will be admissible under section 80G on the basis of the certificate issued by the Drawing and Disbursing Officer (DDO)/Employer in this behalf - Circular No. 2/2005, dated 12-1-2005. 

 
Eligibility for deduction under section 80G-

Any taxpayer whether resident or non-resident can claim deductions under section 80G.

 

Keep in mind the following points under section 80G-
  • Mode of payment: Cash/ Cheque/ Draft.
  • No deduction under this section is allowable in case the amount of donation exceeds Rs 2000/- unless the amount is paid by any mode other than cash.
  • Contributions made in kind also do not qualify for any deduction under this section.
  • Deduction will be available against amount contributed whether it will be 50% or 100% and without any limit or subject to the limit.

 

 
1. Deduction under section 80G without any limit-

Contributions/ Donations to certain Funds as set up and notified by the Government are eligible for 100% or 50% deduction from Gross Total Income of the assessee. 

A) Deduction (as 100% of amount donated)-

S. No.

Particulars

1.

National Defence Fund set up by the Central Government

2.

Prime Minister’s National Relief Fund

3.

National Children’s Fund

4.

National Foundation for Communal Harmony

5.

Approved University or Educational Institution of National Eminence

6.

Zila Saksharta Samiti

7.

Prime Minister’s Armenia Earthquake Relief Fund

8.

Africa (Public Contribution – India) Fund

9.

Fund set up by a State Government for the medical relief to the poor

10.

National Blood Transfusion Council or a State Blood Transfusion Council

11.

Central Welfare Fund of Army or the Indian Naval Benevolent Fund or The Air Force Central Welfare Fund

12.

Chief Minister’s Earthquake Relief Fund, Maharashtra

13.

Fund set up by State Government of Gujarat for providing relief to the victims of earthquake in Gujarat

14.

National Sports Fund or National Cultural Fund or Fund for Technology Development and Application

15.

Chief Minister’s Relief Fund or Lieutenant Governor’s Relief Fund

16.

National Illness Assistance Fund

17.

National Fund for Control of Drug Abuse

18.

Andhra Pradesh Chief Minister’s Cyclone Relief Fund

19.

Swachh Bharat Kosh

20.

Clean Ganga Fund

 

 
B) Deduction (as 50% of amount donated)-

S. No.

Particulars

1.

Rajiv Gandhi Foundation

2.

Jawaharlal Nehru Memorial Fund

3.

Prime Minister’s Drought Relief Fund

4.

Indira Gandhi Memorial Fund

   
2. Deduction under section 80G subject to the limit.

Contribution/ donation made to any other institution or fund notified under section 80G is restricted to 50% or 100% of the Net Qualifying Amount.

A) Deduction (as 100% of amount donated) subject to 10% of adjusted gross total income-

S. No.

Particulars

1.

Donation to Government or any approved local authority, institution or association to be utilized for the purpose of promoting family planning.

2.

Donation by a company (not available to any other assesse) to the Indian Olympic Association or to any other association or institution notified for the development of infrastructure for sports and games in India or the sponsorship of sports and games in India.

 

 

B) Deduction (as 50% of amount donated) subject to 10% of adjusted gross total income-

S. No.

Particulars

1.

Funds/ Institutions which satisfies conditions mentioned under section 80G(5)

2.

Donation to Government or any local authority for the purpose of utilization for any charitable purpose other than promoting family planning

3.

Any authority constituted in India for dealing with and satisfying the needs for housing accommodation or for the purpose of planning/development of  towns, villages, etc.

4.

Any corporation specified in section10(26BB) for promoting the interest of minority community

5.

Any notified temple, mosque, gurdwara, church or other places for the purpose of renovation or repairs

 

Qualifying Limit for deduction under section 80G-

The qualifying limits u/s 80G is 10% of the Adjusted Gross Total Income. The limit is to be applied to the adjusted gross total income. The ‘Adjusted Gross Total Income’ for this purpose is the gross total income (i.e. the sub total of income under various heads) reduced by the following:

  • Amount deductible under Sections 80CCC to 80U (but not Section 80G)
  • Exempt income
  • Long-term capital gains
  • Short- term capital gains taxable @15 per cent under section 111A.
  • Income referred to in Sections 115A, 115AB, 115AC, 115AD relating to non-residents and foreign companies.
   

Example 1- (Without restriction of any limit)

Mr. Ram has taxable salary of Rs 6, 00,000 for the financial year 2018-19. He is eligible for deduction under section 80C for Rs. 75,000. He donates Rs 55,000 to Prime Minister’s National Relief fund. What will be the amount of deduction under section 80G?
 

Answer-

Mr. Ram’s Taxable Salary for the year 2018-19 is as under-

Particulars

Amount (Rs.)

Gross Total Income

6,00,000

Less: Deductions-

 

Under section 80C

75,000

Under section 80G (100% of amount donated)

55,000

Net Taxable Income

4,70,000

 

 

Example 2- (Subject to 10% of adjusted gross total income)

Mr. Ram has taxable salary of Rs 6, 00,000 for the financial year 2018-19. He is eligible for deduction under section 80C for Rs. 75,000. He donates Rs 55,000 for promoting family planning. What will be the amount of deduction under section 80G?
 

Answer-

Mr. Ram’s Taxable Salary for the year 2018-19 is as under-

Particulars

Amount (Rs.)

Gross Total Income

6,00,000

Less: Deductions-

 

Under section 80C

75,000

Gross Total Income before claiming deduction under section 80G

5,25,000

 

Calculation of deduction under section 80G, least of the following-

  1. a) 100% of Rs. 55,000 (amount donated) or
  2. b) 10% of Adjusted Gross Total Income i.e. 5, 25,000 comes to Rs. 52,500

Eligibility for deduction under section 80G is Rs. 52,500 (Least of above i.e. 55,000 or 52,500)

 

Taxable Income is as under-

Particulars

Amount (Rs.)

Gross Total Income before claiming deduction under section 80G

5,25,000

Less: Deduction under section 80G

52,500

Net Taxable Income

4,72,500

 



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