Section 80G: Donations

Approval status of institutions and deduction categories can change. This article is for general information and does not constitute tax advice.

The Four Categories

Donations fall into one of four buckets, depending on the fund or institution: 100% deduction, no upper limit (a short list of national-priority funds, the PM National Relief Fund, PM CARES Fund, and the National Defence Fund among them); 50% deduction, no upper limit (a smaller set of funds with the same unlimited treatment but at half the rate); 100% deduction, subject to a qualifying limit (donations to specific categories such as government or local authority contributions for family planning promotion); and 50% deduction, subject to a qualifying limit (the category most individual donations to approved charitable trusts and institutions fall into).

For the two “with qualifying limit” categories, the deductible amount is the lower of the eligible donation (at 100% or 50%, as applicable) or 10% of Adjusted Gross Total Income, which is Gross Total Income minus every other Chapter VI-A deduction claimed, 80C, 80D, and the rest, but not minus 80G itself. Anything beyond that 10% simply isn’t deductible for the year; it doesn’t carry forward.

The Cash Rule

Donations above ₹2,000 have to be made through a non-cash mode, cheque, UPI, NEFT, RTGS, or bank transfer, to qualify at all. This isn’t a partial restriction: a donation above ₹2,000 paid in cash gets no deduction whatsoever, not even up to ₹2,000 of it. Splitting a larger donation into smaller cash payments to stay under the threshold doesn’t work around this either; it’s treated as an attempt to circumvent the restriction rather than a series of independent small donations.

Form 10BE Is Now Mandatory

Since FY 2022-23, a receipt from the institution alone isn’t sufficient. The recipient institution has to file Form 10BD, a statement of donations received, with the Income Tax Department, and issue Form 10BE, a donation certificate, to the donor, typically by 31 May following the financial year. The department cross-checks what a donor claims against what the institution reported; a mismatch, or a missing Form 10BE, can lead to the deduction being disallowed or the return being flagged for review. Institutions that delay issuing Form 10BE face their own penalty of ₹200 for every day of delay. For AY 2026-27, ITR forms also ask for the specific payment reference number and the bank’s IFSC code for any donation made through a mode other than cash.

Regime and Renumbering

Like the rest of Chapter VI-A, this deduction is available only under the old tax regime, with no exception for any particular fund. It sits under new Section 133 (old Section 80G); under the restructured new framework, eligible charitable institutions are being registered as RNPOs, Registered Non-Profit Organisations, rather than under the earlier approval structure.