How to turn donations into deductions with Section 80G
What's the story
India's Income Tax Act turns generosity into a win-win with Section 80G!
It's not just about giving back—it's about getting rewarded too. This provision allows you to claim tax deductions for donations made to eligible charities.
Whether you're an individual or a business, donating smartly can slash your tax bill while supporting meaningful causes.
From understanding eligible contributions to maximizing your benefits, this guide unlocks the secret to making your generosity work double duty!
Eligibility
Eligibility criteria for claiming deduction
In order to qualify for a Section 80G deduction, donations have to be made to certain funds or charities that are registered with an 80G certificate from the Income Tax Department.
Taxpayers should obtain a stamped receipt indicating the name and address of the charity, its PAN, and the amount donated. This receipt is necessary for claiming the deduction.
Donation types
Types of donations covered
Donations can be made in two ways - monetary and in kind. But only monetary donations qualify for deduction under Section 80G.
These can be made in cash (up to ₹2,000), check, draft, or through digital modes.
Donations in kind such as food, clothes, medicines etc. are not eligible for tax deductions.
Deduction limits
Limits on deductions
The limit of deduction depends on the organization you donate to.
Some donations have no upper limit and taxpayers can claim a full 100% or 50% deduction on the donated amount with no restriction.
Others are capped at 10% of your adjusted gross total income (GTI).
Adjusted GTI is your gross total income minus all other deductions under sections 80C to 80U, except for section 80G.
Documentation
Documentation and proof required
Hold onto those donation records for Section 80G deduction
Essential documents are a stamped receipt from the charity with its name, address, PAN, date, and donation amount; Form No. 58 if donation is in kind; proof of payment.
If you donated via your employer, you need the details from Form 16.
It's wise to keep these documents on hand in case the tax authorities ask for them.
Maximizing benefits
Tips for maximizing benefits
To maximize the benefits of your charitable donations, strategically plan your contributions within the limits that provide the highest deductions.
For example, focusing your donations on funds that grant a full 100% deduction without a qualifying limit will maximize your tax savings.
Additionally, choosing digital payments over cash maintains transparency and permits larger deductible sums as cash donations exceeding ₹2,000 do not qualify for a deduction under this section.