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Introduction:

Section 80G of the Income Tax Act, 1961, facilitates income tax deductions for contributions made to charities and funds, promoting societal welfare through financial support, Section 80G serves as a means through which the Government of India endeavors to inspire individuals to engage in Charitable activities by making charitable donations.

According to this Section, individuals who contribute to charitable institutions and relief funds can avail of the 80G deduction. It’s important to note that not all donations qualify for tax benefits; only contributions to prescribed funds are eligible for the 80G deduction. This benefit is available to all taxpayers, including firms, companies, and individuals.

Tax exemption under Section 80G: 

Contributions to rescue funds or charitable organizations are eligible for tax deduction, offering a reduction that can be utilized in calculating the net taxable income. However, donation deductions are contingent upon the following conditions:

• Various categories of taxpayers, including Indian corporations, partnership firms, and other assesses, are eligible to claim deductions.

• Contributions in kind, such as clothing, food, or drugs, do not qualify for tax deduction or benefits.

• Not all contributions are eligible for full tax deductions. To qualify for a deduction, the assessee must meet the organization’s criteria for eligibility.

• A cash contribution exceeding Rs 2,000 is not eligible .

The amount of the contribution eligible for deduction varies based on the eligibility requirements. It  permits deductions of either 100% or 50%, with or without limitations.

Eligible donation for 100% tax deduction: 

Donations eligible for 100% tax deduction can include those without any qualifying limit.\

• Clean Ganga Fund
• Swachh Bharat Kosh
• Africa (Public Contributions – India) Fund
• Any specialized fund established by the Gujarat Government to aid relief efforts for the victims of the Gujarat earthquake.
• The Maharashtra Chief Minister’s Relief Fund
• Technology Development and Application Fund
• Lieutenant Governor’s Relief Fund or Chief Minister’s Relief Fund pertaining to any Union Territory or State.
• A state government fund aimed at delivering medical assistance to the poor
• National Trust for the Welfare of persons with Multiple Disabilities, Intellectual Disabilities, Cerebral Palsy, and Autism
• National Foundation for Promoting Communal Harmony
• The Prime Minister’s National Relief Fund
• The Central Government’s National Defence Fund
• An accredited educational institution or university of national prominence
• The Zila Saksharta Samiti in any district overseen by the district collector.
• National Illness Assistance Fund 
• National Cultural Fund
• The Andhra Pradesh Chief Minister’s Cyclone Relief Fund of 1996
• Chief Minister’s Earthquake Relief Fund (Maharashtra)
• The Prime Minister’s Relief Fund for the Armenia Earthquake
• The National Blood Transfusion Council or any State Blood Transfusion Council
• National Sports Fund
• National Fund for Control of Drug Abuse

Eligible donation for 50% tax deduction: 

Donations eligible for a 50% tax deduction may include:

• Indira Gandhi Memorial Trust
• Jawaharlal Nehru Memorial Fund
• Rajiv Gandhi Foundation
• Drought Relief Fund of the Prime Minister

How to Claim Deductions under 80G

In order to avail of the tax benefit, individuals are required to furnish these details within their income tax returns:

• Name
• PAN Card
• Address proof 
• Contribution amount
• Eligible Amount 

Documents for Claiming Deduction:

Below is a list of documents necessary to claim tax deduction under section 80G:

• Form 58
• Registration number of the Trust.
• A copy of the Trust’s 80G certificate.
• The donation receipt should include the name and address of the trust, its PAN card details, the donation amount, and the donor’s name.

Section 80GGA: 

Section 80GGA provides deductions for donations made towards rural development or scientific research. This deduction under 80G is available to all assesses except those earning income or incurring losses from a profession and/or business.

Cash, drafts, or checks can be used as forms of payment. Donations in cash beyond Rs. 2,000, however, are not tax deductible. The entire donation amount qualifies for a 100% deduction.

Contribution eligibility under section 80GGA

• Designated Fund for Afforestation
• A local authority, public sector company, approved institution, or association implementing projects eligible under Section 35AC
• An approved institution or association engaged in rural development programs eligible under Section 35CCA
• A research association engaged in statistical or social science research, or a university, college, or similar institution utilized for similar purposes, approved under Section 35(1)(iii).
• An approved institution or association that conducts training for individuals to implement rural development programs
• Designated Rural Development Fund
• Designated National Poverty Eradication Fund

Conclusion:

The Government of India provides backing for commendable initiatives via Section 80G of the Income Tax Act. Both non-resident and resident individuals can avail themselves of tax deductions under this provision. However, expenses deductible under Section 80GGA are not eligible for other tax benefits.