Section 80G Donation Deduction: Eligibility, Limits and ITR Reporting

What Is the Section 80G Deduction?

Section 80G allows a taxpayer to deduct eligible monetary donations made to specified relief funds, approved charitable institutions and certain government funds while computing taxable income.

The entire donation is not necessarily deductible. Depending on the recipient and the purpose of the donation, the deduction may be:

• 100% of the qualifying donation;
• 50% of the qualifying donation;
• available without an income-based limit; or
• restricted by a qualifying limit based on the taxpayer’s adjusted gross total income.

Only donations specifically covered by Section 80G or made to institutions holding valid approval are eligible. Merely making a donation to a charitable organisation does not automatically provide a tax deduction.

Who Can Claim the Deduction?

Section 80G may generally be claimed by eligible taxpayers such as individuals, Hindu Undivided Families, firms, companies and other persons, subject to the tax regime applicable to them.

For individuals and HUFs, the deduction is not available when income is computed under the new tax regime under Section 115BAC. The AY 2026-27 ITR validation rules require Schedule 80G to remain blank where the new tax regime is selected.

Therefore, an individual or HUF intending to claim Section 80G must generally be eligible for and select the old tax regime.

Basic Conditions for Claiming Section 80G

A donation must satisfy the following conditions.

The Donation Must Be Monetary

Only donations made as a sum of money qualify. Donations in kind, such as food, clothes, medicines, books or other goods, do not qualify for the deduction.

The Recipient Must Be Eligible

The donation must be made to:

• a fund specifically listed under Section 80G; or
• a trust, institution or charitable fund having valid approval under Section 80G on the date of donation.

Taxpayers should verify the recipient’s approval status and the applicable deduction category before claiming the deduction. Donations made after the recipient’s approval has expired or been cancelled are not eligible.

Cash Donations Above ₹2,000 Are Not Eligible

A donation exceeding ₹2,000 must be made through a mode other than cash. This may include UPI, cheque, bank transfer, debit card or another traceable payment mode.

The restriction applies to the entire donation and not merely to the amount exceeding ₹2,000. For example, if ₹5,000 is donated in cash, the entire ₹5,000 is ineligible, not only ₹3,000.

The Same Donation Cannot Be Claimed Twice

A donation allowed as a deduction under Section 80G cannot also be claimed under another provision for the same or another assessment year.

Categories of Section 80G Donations

Section 80G broadly divides eligible donations into four categories.

100% Deduction Without Qualifying Limit

The entire eligible donation may be deducted, regardless of the taxpayer’s adjusted gross total income.

Examples include donations to:

• National Defence Fund;
• Prime Minister’s National Relief Fund;
• PM CARES Fund;
• National Children’s Fund;
• National Foundation for Communal Harmony;
• National Sports Development Fund;
• Swachh Bharat Kosh; and
• Clean Ganga Fund, subject to the statutory conditions.

The statutory list should be checked before treating a donation as eligible for a full deduction.

50% Deduction Without Qualifying Limit

A donation to the Prime Minister’s Drought Relief Fund is eligible for a deduction of 50% without applying the 10% qualifying limit.

100% Deduction Subject to Qualifying Limit

Certain donations qualify for a 100% deduction, but only up to the permitted qualifying amount. These include specified donations to the Government or approved authorities for promoting family planning and specified company donations for sports development or sponsorship.

50% Deduction Subject to Qualifying Limit

This is the category under which many donations to approved charitable trusts and NGOs fall.

It includes eligible donations to:

• approved charitable funds or institutions;
• Government or local authorities for charitable purposes other than family planning;
• eligible housing or town-planning authorities;
• specified minority-development corporations; and
• notified places of worship for renovation or repair.

Only 50% of the qualifying amount is deductible.

What Is the 10% Qualifying Limit?

For donations falling under the categories that are subject to a qualifying limit, the total donation considered for deduction cannot exceed 10% of the taxpayer’s adjusted gross total income.

Adjusted gross total income broadly means gross total income reduced by:

• Chapter VI-A deductions other than Section 80G;
• long-term capital gains;
• short-term capital gains taxable under Section 111A; and
• specified income taxable at special rates.

The resulting amount is used to calculate the 10% qualifying limit.

Documents Required to Claim the Deduction

Taxpayers should retain the following records:

• donation receipt;
• name and address of the recipient;
• PAN of the recipient;
• valid Section 80G registration or Unique Registration Number;
• donation amount and date;
• payment confirmation or bank statement;
• cheque number or electronic transaction reference;
• relevant bank IFSC; and
• Form 10BE, wherever applicable.

Approved reporting entities are required to report donor and donation particulars in Form 10BD and issue Form 10BE containing details such as the institution’s name, PAN, approval number and donation particulars. The taxpayer’s claim should match the information reported by the recipient.

How to Report the Donation in the ITR

Step 1: Select the Correct Tax Regime

Individuals and HUFs must select the old tax regime to claim a deduction under Section 80G.

Step 2: Open Schedule 80G

Go to the Chapter VI-A deductions section of the applicable ITR and select Schedule 80G.

Step 3: Select the Correct Donation Category

Report the donation under the appropriate category:

• 100% deduction without qualifying limit;
• 50% deduction without qualifying limit;
• 100% deduction subject to qualifying limit; or
• 50% deduction subject to qualifying limit.

Step 4: Enter Recipient and Donation Details

Enter the applicable information, including:

• name and address of the recipient;
• PAN of the recipient;
• Donation Reference Number or ARN, where applicable;
• amount donated in cash;
• amount donated through another mode;
• total donation amount; and
• eligible deduction amount.

Step 5: Enter Payment Details for AY 2026-27

The notified AY 2026-27 Schedule 80G requires additional information for donations made through a mode other than cash, including:

• transaction reference number for a UPI payment;
• cheque number;
• IMPS, NEFT or RTGS reference number; and
• IFSC of the bank connected with the transaction.

These are additional ITR reporting requirements. They do not independently change whether the donation is eligible under Section 80G.

Step 6: Match the Claim With Form 10BE

Verify that the recipient’s PAN, donation amount, registration particulars and donor details agree with Form 10BE and the donation receipt.

A mismatch between the ITR claim and the information reported by the recipient in Form 10BD may result in the deduction being questioned or restricted during return processing.

Common Mistakes to Avoid

Treating Every Donation as 100% Deductible

Many donations to ordinary approved NGOs qualify for only a 50% deduction and may also be subject to the 10% qualifying limit.

Claiming Cash Donations Above ₹2,000

The deduction is not available where the donation exceeds ₹2,000 and is paid in cash.

Claiming Under the New Tax Regime

Individuals and HUFs cannot claim Section 80G while using the new tax regime under Section 115BAC.

Not Checking the Recipient’s Approval

The organisation must hold valid approval on the date on which the donation is made.

Ignoring Form 10BE

The donation amount, recipient PAN and registration details should be reconciled with Form 10BE wherever the recipient is required to issue it.

Omitting the Payment Reference and IFSC

For AY 2026-27, the notified Schedule 80G includes specific payment-reference and bank-IFSC fields for donations made through a mode other than cash.

Income-tax Act, 1961 and Income-tax Act, 2025

The return for income earned during FY 2025-26 must be filed for AY 2026-27 under the Income-tax Act, 1961, even though the return is filed after the Income-tax Act, 2025 came into force on 1 April 2026.

For income earned from 1 April 2026 onwards, the corresponding donation deduction is contained in Section 133 of the Income-tax Act, 2025. The new provision retains the monetary-donation requirement, the ₹2,000 cash restriction and the 10% adjusted-gross-total-income framework for specified donations.

Conclusion

Section 80G provides a deduction only for eligible monetary donations made to specified or approved recipients. The correct deduction depends on the recipient’s category, the applicable percentage and whether the 10% qualifying limit applies.

For AY 2026-27, taxpayers should also keep complete electronic-payment details, including the transaction reference number and applicable bank IFSC, and ensure that the ITR claim agrees with the donation receipt and Form 10BE.


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