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Eligible Donations In Section 80G and 80GGA | Company Vakil

You may have the willingness to assist the less privileged in the society by giving to charity as you aim to make a difference. The interesting thing about this noble cause is that you have the full support of the government. The tax act has Section 80G which allows the tax to be deducted from tax donations paid to any charitable organization.

We will discuss the following sub-topics.

1. Section 80G

2. Eligible donations for 100% Deduction Without Qualifying Limit

3. Eligible contributions for 50% Deduction Without Qualifying Limit

4. Eligible contributions for 100% Deduction as it relates to 10% of Adjusted Gross Total Income

5. Eligible donations for 50% Deduction as it relates to 10% of Adjusted Gross Total Income

6. Section 80GGA

7. Eligible donations Under Section 80GGA

8. Total Adjusted Income

1. Section 80G

Donations made to some charitable organizations can be claimed as deductions made under the Income Tax Act Section 80G. Not all donations made are eligible for deduction under section 80G. The only qualified deductions are the ones made to prescribed funds.

The deduction allowed to all types of taxpayers: This is deductions made by any person or taxpayer (company or firm).

Mode of Payment: This refers to deductions claimed when the contribution is made through cheque or draft or in cash. But there is no deduction allowed for cash donations exceeding Rs 10,000. For contributions made in kind such as food material, medicines, clothes, etc. are not eligible for deduction under section 80G.

From 2017-18 Financial Year onwards: Any cash donations exceeding Rs 2,000 will not be termed as a deduction. Thus donations exceeding Rs 2,000 should be paid in any method aside from cash to be eligible as a deduction under section 80G.

Amount of Donation: The numerous donations specified in section 80G are qualified for up to 100% or 50% deductions with or without limit as section 80G provides.

How to claim the deduction: To claim this deduction you need to submit the following information in your Income Tax Return

  • Name of Donee
  • PAN of the Donee
  • Donee Address
  • Amount contributed

 

2. Eligible donations for 100% Deduction Without Qualifying Limit

  • National Defence Fund initiated by the Indian Central Government
  • Prime Minister’s National Relief Fund
  • National Foundation for Communal Harmony
  • A reputable university/educational institution
  • Zila Saksharta Samiti established in any district under the chairmanship of the district collector
  • State Government funds for medical relief to the poor
  • National Illness Assistance Fund
  • National or State Council for Blood Transfusion
  • National Trust for Welfare of Persons living with Autism, Mental Retardation, Cerebral Palsy, and Multiple Disabilities
  • National Sports Fund
  • National Cultural Fund
  • National Fund for Control of Drug Abuse (from the 2015-16 Financial year)
  • Chief Minister’s Earthquake Relief Fund, Maharashtra
  • Fund for Technology Development and Application
  • National Children’s Fund
  • Prime Minister’s Armenia Earthquake Relief Fund
  • Any trust fund to which Section 80G(5C) applies for providing relief to earthquake victims in Gujarat
  • Africa (Public Contributions – India) relief Fund
  • The Army/ Air Force Central Welfare Fund, or the Indian Naval Benevolent Fund, or the Andhra Pradesh Chief Minister’s Cyclone Relief Fund, 1996
  • Chief Minister or Lieutenant Governor’s Relief Fund
  • Clean Ganga Fund (payable from the 2014-15 Financial year)
  • The Maharashtra Chief Minister’s Relief Fund during 1st October 1993, and 6th October 1993
  • State Government of Gujarat funds set up solely for relief purposes to earthquake victims in Gujarat
  • Swachh Bharat Kosh

3. Eligible donations for 50% Deduction Without Qualifying Limit

  • Rajiv Gandhi Foundation
  • Jawaharlal Nehru Memorial Fund
  • Indira Gandhi Memorial Trust
  • Prime Minister’s Drought Relief Fund

4. Eligible contributions for 100% Deduction as it relates to 10% of Adjusted Gross Total Income

  • Local government authority, institution or organization to be used for promoting family planning
  • Company donations to the Indian Olympic Association or any other sports development association or establishment in India.

5. Eligible contributions for 50% Deduction as it relates to 10% of Adjusted Gross Total Income

  • Any fund or institution which meets the conditions stated in Section 80G(5)
  • Government or any local authority to be used for any charitable purpose aside from promoting family planning
  • Any constituted authority in India tasked with satisfying the housing needs or for the planning, development or improvement purposes of cities, towns, and villages.
  • Any organization mentioned in Section 10(26BB) for supporting minority interest in community
  • For repairs or renovation of the temple, church, mosque, gurudwara, or another religious place.

6. Section 80GGA

This section allows the donation to be deducted towards rural development or scientific research. This deduction is applied to all assessees except those who record profit or loss from business and profession.   Mode of payment: The two main ways of donations include cheque, draft or in cash; however you are not allowed to make cash donations exceeding Rs 10,000. The total 100% of the money donated is eligible for deduction.

7. Eligible Donations Under Section 80GGA

  • Amount remitted to a research association undertaking scientific research or paid to an institution (colleges and universities) for scientific research which are all sanctioned by the set authority under section 35(1)(ii)
  • Amount remitted to a research association researching social science or statistic or the amount paid to a college, university or any other educational institution for the same purpose which are all sanctioned by the set authority under section 35(1)(iii)
  • Amount remitted to approved association or institution undertaking any rural development program and adopted under section 35CCA
  • The approved sum paid to association or institution involved in the training of persons for implementing rural development programs
  • Paid amount to a company in the public sector, local authority or an approved association or institution engaged in carrying out the project or scheme sanctioned under section 35AC.
  • Amount remitted to notified National Poverty Eradication Fund
  • Amount remitted to notified Rural Development Fund
  • Amount remitted to notified Fund for Afforestation

Note: If a deduction is ratified under section 80GGA, such payments shall not be deducted under any other income tax act provision.

8. Adjusted Total Income

This refers to the total gross income (sum of income under all heads) except the following:

  • Exempt income
  • Long-term capital gains
  • Deductible amount under Sections 80CCC to 80U (but not Section 80G)
  • Income stated in Sections 115A, 115AB, 115AC, 115AD and 115D, which relates to non-residents and foreign companies.

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