Section 80G of the Income Tax Act lets you claim a deduction for donations made to approved charitable institutions, relief funds, and trusts. But not every donation gets the same treatment, depending on who you donate to, you might get 100% or just 50% of your donation as a deduction, and some categories cap how much of your income can even be considered. Here’s exactly how it works.
Under the Income Tax Act, 2025, effective April 1, 2026, Section 80G has been renumbered as Section 133. The deduction categories and limits remain unchanged, only the section reference has changed.
Who Can Claim a Section 80G Deduction?
Individuals, Hindu Undivided Families (HUFs), companies, partnership firms, and NRIs can all claim this deduction, provided they’re on the Old Tax Regime. Section 80G is not available under the New Tax Regime.
The Four Deduction Categories Under Section 80G
This is the part most people actually need clarity on. Donations fall into one of four categories, based on both the deduction percentage and whether a 10% income-based cap applies:
Category 1: 100% deduction, no qualifying limit.
The full donation is deductible, with no cap tied to your income. This covers funds like the National Defence Fund, the Prime Minister’s National Relief Fund, the National Foundation for Communal Harmony, and the National or State Blood Transfusion Council.
Category 2: 100% deduction, subject to the 10% qualifying limit.
The full donated amount is deductible, but only up to 10% of your adjusted gross total income. This covers donations to approved universities, research institutions, and IIT development funds.
Category 3: 50% deduction, no qualifying limit.
Half the donation is deductible, with no income-based cap. This includes funds like the Jawaharlal Nehru Memorial Fund, the Prime Minister’s Drought Relief Fund, the Indira Gandhi Memorial Trust, and the Rajiv Gandhi Foundation.
Category 4: 50% deduction, subject to the 10% qualifying limit.
This is the most common category by far, covering most general charitable trusts, religious institutions, hospitals, and donations to a local authority or government body for charitable purposes.
How Is the 10% Qualifying Limit Actually Calculated?
For donations in Category 2 and Category 4, the deduction is capped at 10% of your Adjusted Gross Total Income (AGTI), not your full income. AGTI is calculated as your gross total income, minus all Chapter VI-A deductions except 80G itself (so exclude 80C, 80D, and similar deductions from your income first), minus exempt long-term capital gains, and minus certain other special-rate income.
A Worked Example
Anil has a gross total income of ₹14,00,000. He’s already claimed ₹1,75,000 under Sections 80C and 80D, bringing his adjusted gross total income to ₹12,25,000. His qualifying limit for Section 80G purposes is 10% of this, or ₹1,22,500.
During the year, Anil donates ₹50,000 to the PM National Relief Fund (Category 1, 100% deduction, no limit) and ₹1,50,000 to a registered NGO (Category 4, 50% deduction, subject to the qualifying limit).
- The PM Relief Fund donation is fully deductible: ₹50,000.
- The NGO donation is capped at his ₹1,22,500 qualifying limit (since his actual donation of ₹1,50,000 exceeds it), and only 50% of that capped amount is deductible: ₹61,250.
- Total Section 80G deduction: ₹1,11,250.
Cash Donation Rules
Donations above ₹2,000 must be made through a non-cash mode, bank transfer, cheque, demand draft, or digital payment, to qualify for deduction. Cash donations above this threshold don’t qualify at all, regardless of which category the recipient falls under.
What Documentation Do You Need?
The donee institution must file Form 10BD and issue you a Form 10BE certificate, typically by May 31 following the end of the financial year. When filing your return, you’ll need the donee’s name, address, and PAN, the donation amount split by payment mode, and the Acknowledgement Reference Number (ARN) where applicable. Your claim should match exactly what’s on your Form 10BE certificate.
Before You Donate: Verify the Organisation’s Current Status
This matters more than people often realise, including for well-known, large organisations. Section 80G eligibility, and which of the four categories a specific organisation falls under, isn’t fixed forever, registrations can lapse, change, or be organisation-specific even within the same broader charitable movement. Before claiming a deduction for a donation to any specific NGO or trust, check the Income Tax Department’s official list of approved institutions, or ask the organisation directly for their current 80G registration details and category, rather than assuming based on the organisation’s general reputation or size.
Frequently Asked Questions
What is the maximum deduction limit under Section 80G?
It depends on the category. Donations to certain government funds (Category 1) have no cap at all. Donations to general charitable trusts and religious institutions (Category 4, the most common) are capped at 10% of your adjusted gross total income, with only 50% of that capped amount actually deductible.
What is the 80G exemption list?
The Income Tax Department maintains an official list of institutions approved for Section 80G deductions, categorised by whether they qualify for 100% or 50% deduction, and whether a qualifying limit applies. Always check this current list, or ask the organisation directly, rather than assuming an institution qualifies based on its reputation alone.
Can I claim a deduction for a cash donation?
Only up to ₹2,000. Cash donations above this amount don’t qualify for a Section 80G deduction; you’ll need to donate through a bank transfer, cheque, or digital payment instead.
What documents do I need to claim a Section 80G deduction?
A Form 10BE certificate from the donee institution, which should match the donation details you report in your ITR, including the donee’s PAN and the Acknowledgement Reference Number where applicable.
Is Section 80G available under the New Tax Regime?
No. This deduction is available only under the Old Tax Regime.
How do I know if my donation qualifies for 100% or 50% deduction?
It depends entirely on which institution you’re donating to. Check the Income Tax Department’s approved institutions list, or the specific 80G certificate provided by the organisation, to confirm its current category before assuming.
Has Section 80G been renamed under the new tax law?
Yes. Under the Income Tax Act, 2025, it’s now Section 133. The four deduction categories and their limits remain unchanged, only the section reference has changed.
Last Updated on 25 minutes ago by Team Paisaseekho
