Earn interest up to 7.75% p.a. by investing in a Bajaj Finance Fixed Deposit | Rated CRISIL AAA/ STABLE and [ICRA]AAA(stable)

 Introduction

Charity organisations work tirelessly to help the less fortunate and needy sections of society. To support their work, the government provides tax deductions to citizens for donations to charities. Section 80G of the Income Tax Act governs the specific rules and general extent of charitable donation tax deductions.

What is Section 80G?

Section 80G of the Income Tax Act allows you to claim a tax deduction on charitable contributions made during the fiscal year when you file your income tax return. This puts you in a lower tax bracket and reduces your tax obligations. A unique feature of Section 80G is that there is no cap on the amount of your tax-deductible donation when filing an ITR for a specific number of charities.

Deduction under Section 80G - Terms & Conditions

Certain terms and conditions need to be met for claiming tax deductions under Section 80G. Three of the most important conditions are:

 

  1. Tax deductions cannot be claimed for contributions over ₹2,000 made in cash. These changes were put in place by the budget of 2017.

  2. Contributions made in kind are not eligible for tax deductions under Section 80G of the Income Tax Act.

  3. Contributions made to trusts registered outside India are not eligible for tax deductions.

What is the Mode of Payment to Avail Section 80G?

The deductions applicable under Section 80G of the Income Tax Act can be claimed only when the contribution is done through a cheque, draft, cash. Any in-kind contribution like clothes, medicines, stationery will not qualify in the Section 80G deduction calculation. From FY 2017-18 onwards, cash donations above ₹2,000 are not to be considered in Section 80G deduction calculation. You will have to make the payment in any other mode than cash for an amount greater than ₹2,000. The donations made will be eligible in the Section 80G deduction limit up to 100% or 50% with or without restriction as prescribed in the section.

Eligibility for Claiming Deductions Under 80G

In order to claim tax deductions under Section 80G of Income Tax Act, you would have to meet the eligibility criteria mentioned below:

 

  • NRIs contributing to applicable trusts

  • Individuals and HUFs

  • You should have relevant proof of your contributions

  • You should have made the contribution to the charitable organisation from your taxable income. Donations made from non-taxable income is not eligible for deductions

Claiming 80G Tax Deductions

A proof of payment is of paramount importance when claiming deductions under Section 80G for charitable contributions. For a successful tax rebate, ensure that you collect a receipt of your donation from the charity that you donated to. The receipt needs to contain the following information:

 

1. Name of the donor

 

2. The amount that was donated

 

3. Name, Address, and PAN of the benefactor of the donation

 

4. Registration number of the charity

Donations Permitted under Section 80G

As per Section 80G, you can claim deductions under two broad categories:

 

  • Donations without an upper limit: 50% or 100% of the total contribution made can be deducted, according to the charitable institution where donation is made, without any other limitation.

  • Donations with an upper limit: 50% or 100% of the total contribution can be tax-deductible, in accordance with the charitable organisation where the money is donated to. You should note that the amount deducted in this type is limited only to 10% of your gross total income.

Here is a look at some charitable organisations where you can contribute to and details about the deduction limit, according to the prevailing tax norms:

No.

Charity Name

Percentage of Tax Deduction that is Allowed

Is the Donation Subject To Limit

1

Welfare Fund of Armed Forces

100%

×

2

Chief Minister’s Relief Fund (LG’s) of any State (Union Territory)

100%

×

3

National Illness Assistance Fund

100%

×

4

National Blood Transfusion Council

100%

×

5

National Children’s Fund

100%

×

6

Zila Saksharta Samiti

100%

×

7

Fund for Providing Medical Assistance to Poor by the State Government

100%

×

8

Rajiv Gandhi Foundation

50%

×

9

Jawaharlal Nehru Memorial Fund

50%

×

10

PM’s Drought Relief Fund

50%

×

11

Indira Gandhi Memorial Trust

50%

×

12

Indian Olympic Association

100%

 ✓

13

Swachh Bharat Kosh

100%

×

14

Approved University or Educational Institution of National Importance like IIT, NIT etc.

100%

×

15

National Cultural Fund

100%

×

16

PM’s National Relief Fund

100%

×

17

Clean Ganga Fund

100%

×

18

National Trust for the well-being of people having cerebral palsy, Autism, multiple disabilities and Mental Retardation

100%

×

19

CM’s Earthquake Relief Fund, Maharashtra

100%

×

20

Fund for Development of Technology and Application

100%

×

Documents Required to Claim Deduction under Section 80G

While filing tax returns, if one wishes to claim income tax deduction under Section 80G, then the following documents need to be submitted alongside your ITR.

 

  1. Stamped Receipt: The donation needs to be authenticated with a stamped receipt from the benefactor organization.

  2. Form 58: To claim a 100% tax deduction for your donations at the end of the financial year, remember to download, fill, and submit Form 58. You can download it here.

Key differences between sections 80G, 80GGB, 80GGC

While filing tax returns, people sometimes conflate Section 80G with Section 80GGC or section 80GGB. While all three of these sections have to do with claiming tax deductions for donations made in the previous financial year, they have the following differences:

 

  1. Section 80G is for claiming tax deductions for donations made to charitable organizations and trusts.

  2. Section 80GGB is for claiming tax deductions for donations made to political parties by registered Indian companies.

  3. Section 80GGC is for claiming tax deductions for donations made to political parties by other categories of taxpayers such as individuals, HUFs, etc.

Conclusion

Section 80G is an effective and easy way to get tax deductions. However, if one is looking to get additional tax deductions, they can do so by opting for Bajaj Allianz Health Insurance on Bajaj Markets. The health insurance plan on Bajaj Markets qualifies for tax deductions under Section 80D of the Income Tax Act. Other than offering the benefit of tax savings, this insurance plan protects you and your family in times of medical emergencies by offering a host of perks such as a sum assured of up to ₹50 lakh, coverage for pre and post hospitalisation expenses, free health check-ups after 3 years, coverage for alternative treatments, and much more. Minimise your tax outgo while protecting the medical and financial health of your loved ones.

FAQs

  • ✔️What is Section 80G?

    Section 80G offers an income tax deduction for various contributions made as donations to certain relief funds and charitable institutions.

  • ✔️Can NRIs claim Section 80G deductions?

    Yes, NRIs can also claim Section 80G deductions if they have contributed towards applicable trusts.

  • ✔️What are the documents required to claim Section 80G deductions?

    A stamped receipt is required to claim Section 80G deduction and also Form 58 to claim 100% tax deduction under Section 80G.

  • ✔️Can I claim Section 80G deductions for in-kind contributions?

    No, you cannot claim a tax deduction for in-kind contributions.

  • ✔️Can I claim a Section 80G deduction for a cash donation of ₹10,000?

    No, you cannot claim deduction on ₹10,000 as the Section 80G deduction limit in cash is ₹2,000.

Happy Customers of Bajaj Markets

Getting a loan to take care of my wedding and relieving my parents to enjoy the occasion was the best decision I ever made. Easy-to-apply, amazing interest rate and quick disbursal, what more can one ask for!

I am passionate about the vehicle I drive and hence I wan't to protect it with the best available option. What amazed me about Bajaj Finserv Markets was full transparency, quick quotes and the attractive discount on the premium while choosing annual payment option!

Check your personal loan eligibility in seconds!

My husband and I will finally move into our own house this Diwali. All thanks to Bajaj Finserv – Markets, with competitive interest rates, minimal processing fees and easy to repay EMIs, our dream saw the light of reality in no time!

Get the best FD interest rates starting @ 8.40%. Let's start!

Kids grow up fast and to fulfill their dream trip to Disneyland I had everything but instant funds. With no collateral or guarantor required and a hassle-free processing, I gifted my family a memorable trip to Paris just at the click of a mouse!

Get sum insured up to 1 Crore! Let's start!

The best way to start looking for health insurance is not a 60 minute meeting with an insurance sales person but with a close study of my coverage needs and checking the insurance company's claim ratio. No unnecessary jargons, easy to apply claims process and choice of premiums, what else could I have asked for as a newbie!

Zero additional charge on part-payment option on Business loans! Let's start!

I bought my first iPhone using my Bajaj Finserv EMI Network Card. Zero downpayment, No cost EMI on Bajaj Finserv Markets EMI store and the smile on my dad's face just made my day!

Get home loan sanctioned online in 72 hours! Let's start!