What is 80G in income tax?

There are many ways to claim tax exemption. You can claim exemption for tax when you purchase a house, avail home loan, etc. One of the other ways to claim tax exemption is contributions made as donations. This deduction falls under the act of 80G. The 80G section was introduced by the Government of India to encourage people to donate. This is what is 80G in Income Tax in simple words.

I was pretty curious to save on my taxes so I learnt more about this section after talking to my chartered accountant. Let me share some key insights with you on what is section 80G in income tax.

What is 80G deduction in income tax?

Donations can be claimed by individuals, partnership firms, HUF, company and other types of taxpayers, irrespective of the type of income earned as per Section 80G. Institutions and trusts who are registered under Section 80G have a registration number which is issued by the Income Tax Department. The registration should be valid when the donation is occurring. In case the registration is not valid you cannot avail of tax exemption as per Section 80G.

What is 80G deduction in income tax?

Donation under 80G can be of four categories those includes:

• You can obtain a 100% tax deduction when you donate to funds such as Communal Harmony, National/State Blood Transfusion Council, etc.

• You can obtain a 50% tax deduction when donating to trusts such as the Prime Minister’s Drought Relief Fund, National Children’s Fund, Indira Gandhi Memorial Fund, etc. 

• You can avail of 100% tax deduction up to 10% of adjusted gross total income when donating to local authorities and government for the promotion of family planning and donations to Indian Olympic Association.

• You can avail 50% tax deduction available up to 10 % of adjusted gross total income when donation is made to local or government bodies for charitable purposes.

While claiming the tax deduction you should have documents such as the donation receipt that  includes the name of the NGO, name of the donor, amount donated, Registration number of the Trust.

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