Section 80G Deduction on Donations: 50% vs 100%, Limits and Form 10BE
How the Section 80G deduction really works — which donations get 100% or 50%, the 10% qualifying limit, the ₹2,000 cash rule and why Form 10BE now decides your claim.
A section 80g deduction reduces taxable income, not tax rupee for rupee: eligible donations receive a 50% or 100% deduction, sometimes subject to a 10% adjusted-income limit. For FY 2025-26 / AY 2026-27, individuals generally need the old tax regime, a qualifying monetary donation and supporting records. Check the donee’s eligibility, payment mode and, where applicable, Form 10BE before claiming relief under Sec. 80G Income-tax Act.
Who can claim a section 80g deduction?
Individuals, HUFs, firms and companies can qualify, but their chosen tax regime may prohibit the deduction.
Sec. 80G Income-tax Act remains applicable for FY 2025-26 / AY 2026-27. Individuals and HUFs cannot claim it under the new regime in Sec. 115BAC Income-tax Act.
“Old regime only” is useful shorthand for individuals, but firms and companies have different rules. Companies opting for concessional taxation under Sec. 115BAA Income-tax Act or Sec. 115BAB Income-tax Act cannot claim Sec. 80G relief.
For individuals, compare the complete tax liability under both regimes. A donation deduction does not automatically make the old regime cheaper. Taxpayers with business or professional income must also observe the applicable Form 10-IEA requirements and restrictions when opting out of the new regime.
Which donations qualify for 50% or 100% deduction?
The statutory category of the recipient and donation determines both the deduction percentage and whether the qualifying limit applies.
| Category | Deduction | Qualifying limit | Examples |
|---|---|---|---|
| A | 100% | None | Prime Minister’s National Relief Fund, PM CARES Fund, National Defence Fund |
| B | 50% | None | Prime Minister’s Drought Relief Fund |
| C | 100% | 10% of adjusted gross total income | Government or approved local authority, institution or association for promoting family planning |
| D | 50% | 10% of adjusted gross total income | Most eligible donations to approved charitable trusts and NGOs |
The Jawaharlal Nehru Memorial Fund is no longer an eligible example: its Sec. 80G eligibility was withdrawn from AY 2024-25.
An NGO’s trust registration or charitable status alone does not establish eligibility. Check its valid approval under Sec. 80G Income-tax Act.
Do not assume every temple donation qualifies. Ordinary religious offerings generally do not. Specific relief exists for renovation or repair of notified places of worship; a qualifying charitable trust may separately hold valid approval.
How does the 10% qualifying limit work?
For capped categories, the qualifying donation is restricted to 10% of adjusted gross total income before applying the relevant deduction percentage.
Broadly, adjusted gross total income means gross total income less:
- Other allowable Chapter VI-A deductions, such as Sec. 80C Income-tax Act and Sec. 80D Income-tax Act.
- Long-term capital gains.
- Short-term capital gains taxable under Sec. 111A Income-tax Act.
- Other income against which Chapter VI-A deductions are barred, including relevant special-rate income.
This is not simply 10% of salary or turnover. The ceiling applies collectively to capped donations, not separately to each NGO.
Worked example: Ramesh’s ₹1,50,000 donation
Ramesh chooses the old regime, has gross total income of ₹14,00,000 consisting entirely of normal slab-rate income, and claims ₹1,50,000 under Sec. 80C Income-tax Act and ₹25,000 under Sec. 80D Income-tax Act. He donates ₹1,50,000 electronically to a Category D NGO.
| Calculation | Amount |
|---|---|
| Gross total income | ₹14,00,000 |
| Less other Chapter VI-A deductions | ₹1,75,000 |
| Adjusted gross total income | ₹12,25,000 |
| Qualifying ceiling: 10% | ₹1,22,500 |
| Qualifying donation: lower of payment and ceiling | ₹1,22,500 |
| Deduction: 50% of qualifying donation | ₹61,250 |
His taxable income falls from ₹12,25,000 to ₹11,63,750. The entire reduction falls within the 30% old-regime slab.
Including 4% health and education cess, the saving is ₹19,110, roughly ₹19,100, not ₹46,800. The donation’s effective after-tax cost is ₹1,30,890. His unabsorbed donation cannot be carried forward under Sec. 80G Income-tax Act.
Which payment and approval rules can invalidate a claim?
The donation must be monetary, satisfy the payment restrictions and reach an eligible recipient with approval where required.
- Cash exceeding ₹2,000: Under Sec. 80G(5D) Income-tax Act, a cash donation exceeding ₹2,000 receives no deduction, including for the first ₹2,000. Prefer UPI, bank transfer, card or cheque.
- Donations in kind: Clothes, food, equipment and volunteer time do not qualify.
- Invalid approval: For approval-based institutions, verify that approval covers the donation date. Regular approvals generally run for five years and provisional approvals generally for three years, subject to the applicable statutory conditions.
- Incorrect year: Claim in the financial year of payment, not the year the certificate arrives.
There is no statutory minimum donation. A receipt should identify the donor, donee, date, amount and payment mode.
Why do Form 10BD and Form 10BE matter?
For institutions subject to donation reporting, Form 10BD records donations with the Department and Form 10BE provides the donor’s certificate.
The reporting framework has operated since AY 2022-23. Under Sec. 80G(5) Income-tax Act read with Rule 18AB Income-tax Rules, covered institutions must file Form 10BD and furnish Form 10BE by 31 May following the financial year.
For FY 2025-26, the ordinary deadline is 31 May 2026, unless officially extended.
Provide the institution with accurate identification details, preferably your PAN. Check the amount and donor details on Form 10BE against your receipt and bank record.
A missing or incorrect Form 10BD entry can jeopardise the deduction. However, saying every missing Form 10BE automatically causes processing disallowance is too broad. Certain specifically named funds are outside this institution-reporting framework. Where reporting applies, ask the donee to file or correct Form 10BD and issue the corresponding certificate.
How should you enter the donation in your ITR?
Report eligible donations in Schedule 80G under the correct percentage-and-limit category using the applicable return’s required particulars.
Enter the donee’s name, address and PAN, donation amount, and cash versus non-cash components. Where required, enter the donation reference number, or ARN, from Form 10BE. Do not confuse it with the institution’s approval or registration number.
Retain:
- Donation receipt and payment evidence.
- Form 10BE, where applicable.
- Approval details and correspondence correcting mismatches.
These records are ordinarily retained rather than attached to the ITR. If an intimation reduces your claim, check whether the issue is reporting, calculation, classification or regime selection before responding.
Are CSR spending and political donations covered?
CSR-related donations require a separate eligibility review, while political contributions fall under provisions other than Sec. 80G Income-tax Act.
A blanket statement that all CSR donations are ineligible under Sec. 80G is incorrect. CSR expenditure under Sec. 135 Companies Act is excluded from general business deduction by Explanation 2 to Sec. 37(1) Income-tax Act. A separate Sec. 80G claim depends on its conditions, the company’s tax regime and relevant judicial decisions. CSR contributions to the Swachh Bharat Kosh and Clean Ganga Fund are specifically excluded from their respective Sec. 80G relief.
Eligible non-company taxpayers, including individuals, use Sec. 80GGC Income-tax Act for qualifying political contributions. Indian companies use Sec. 80GGB Income-tax Act. These can provide a 100% deduction, but cash is prohibited and regime restrictions remain relevant.
How SP & SC helps
SP & SC Legal and Taxation Services, Bengaluru, reviews donation eligibility, documentation, regime comparisons and disputed deductions.
We check approval validity, Form 10BE mismatches, Schedule 80G calculations and intimation responses. Fees are a fixed quote after reviewing the case, communicated before work begins. Compare regimes with our income tax calculator or talk to us.
Frequently asked questions
These answers address common timing and eligibility issues.
Can I claim an April donation when Form 10BE arrives next May?
Yes. An April 2025 donation belongs to FY 2025-26 / AY 2026-27; the ordinary certificate deadline is 31 May 2026.
Does donating to a foreign charity qualify?
Usually not. A direct donation to an overseas charity does not qualify merely because it has foreign charitable status; the recipient must meet Indian statutory eligibility requirements.
Is there a minimum donation?
No, but monetary payments and other eligibility conditions are essential. Cash donations exceeding ₹2,000 are disallowed.
Does a 100% deduction mean a full tax refund?
No. It reduces taxable income by the eligible amount. The tax saving depends on your applicable tax rate.
Can I claim using only a receipt?
Do not rely on it alone where Form 10BD reporting applies. Obtain Form 10BE and resolve reporting discrepancies before filing wherever possible.
Written by
SP & SC Editorial
Editorial team at SP & SC Legal and Taxation Services — practising advocates, chartered accountants, and company secretaries publishing hands-on guidance from live client files.
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