The Income Tax Department has issued a detailed set of FAQs under its NUDGE campaign to help taxpayers correctly claim deductions under Section 80G of the Income Tax Act, 1961. The clarification comes amid increased data matching and verification of deductions claimed in Income Tax Returns (ITRs).
Section 80G allows taxpayers to claim deductions on donations made to specified funds, trusts, and charitable institutions, subject to conditions, limits, and reporting compliance by both donors and donees
Who Can Claim Deduction Under Section 80G?
Any taxpayer-individuals, HUFs, firms, companies, or other persons having taxable income and making donations to eligible institutions can claim a deduction under Section 80G, provided the donation is made through permissible modes and supported by proper documentation
Four Categories of 80G Deductions
Donations eligible under Section 80G fall into four broad categories:
- 100% deduction without limit (e.g., PM CARES Fund, National Defence Fund)
- 50% deduction without limit (e.g., PM's Drought Relief Fund)
- 100% deduction with qualifying limit (subject to 10% of adjusted GTI)
- 50% deduction with qualifying limit (subject to 10% of adjusted GTI)
Donations falling under the "with limit" category are capped at 10% of Adjusted Gross Total Income and excess amounts are ignored
Cash Donation Restriction
No deduction is allowed for cash donations exceeding Rs 2,000. Eligible donations must be made through cheque, demand draft, or electronic modes such as UPI, net banking, or card payments
Mandatory Verification via Form 10BD & 10BE
From recent assessment years, deduction claims under Section 80G are system-verified:
- Donee institutions must file Form 10BD, reporting donor-wise details.
- Donors must obtain Form 10BE (Donation Certificate) from the donee.
- If the donation claimed in the ITR does not match the Form 10BD data, the deduction may be disallowed
No Double Deduction Allowed
Taxpayers claiming a deduction under Section 80G cannot claim the same donation under any other section of the Income Tax Act. One donation qualifies for only one deduction.
Not Available Under New Tax Regime
Taxpayers opting for the new tax regime under Section 115BAC are not eligible to claim deduction under Section 80G, a point often overlooked while filing returns
Key Reminder for Taxpayers
- Donations in kind are not eligible.
- Only donations to registered and approved 80G institutions qualify.
- Deduction cannot be carried forward to future years.
- If the donee's 80G registration is cancelled, donations made thereafter become ineligible.
The Income Tax Department has advised taxpayers to verify the eligibility of donee institutions through the official exempted institutions utility before making or claiming donations.
To access the full list of FAQs issued by the Income Tax Department, find the enclosed file
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