Tax deduction under Section 80G: Eligible donations, cash limits and key conditions explained

A donation is the actual amount of money donated to a charitable organization, trust or fund. However, a deduction is the tax benefit you get for making that donation to any eligible donee, when computing your taxable income as per extant rules and provisions of Section 80G of the Act.

Any taxpayer, including individuals, HUFs, companies, firms, or any other person, who has taxable income and has made donations to an eligible entity, can claim a deduction under this section.

As per Section 80G(1), 80G(2) and 80G(4) of the Section 80G of the Income Tax Act, 196, donations fall into four categories based on deduction limits:
100% deduction without limit: Full donation amount is allowed as deduction, with no maximum limit.
50% deduction without limit: 50% of the donation amount is allowed as deduction, with no maximum limit.
100% deduction with limit: Full donation amount is allowed as deduction, subject to a maximum of 10% of adjusted gross total income.
50% deduction with limit: 50% of the donation amount is allowed as deduction, subject to a maximum of 10% of adjusted gross total income.

No deduction shall be allowed under Section 80G in respect of any donation of any sum exceeding two thousand rupees unless such sum is paid by any mode other than cash (section 80G(5D)).

The charitable trust, organization or funds registered under section 80G issues Form 10BE which includes the details of the donee i.e. name, address, PAN, Unique Registration Number (URN) etc. The donor can ask the trust, organization or funds to provide the certificate which includes the essential details for claiming deduction under section 80G of the Income Tax Act, 1961.