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Deduction in respect of donations to certain funds, charitable institutions etc. - Section 80G - Income Tax - Ready Reckoner - Income TaxExtract Deduction in respect of donations to certain funds, charitable institutions etc. - Section 80G This deduction is available to all assessee (individual, company, firm or any other person, may be resident or non-resident). Donations given by an assessee are eligible for deduction. The amount of deduction is 100% (50% in few cases). Donation should be given to institutions/ funds mentioned u/s 80G(2) . The list of such institutions (list is not exhaustive) is as follows: I. Donation without any qualifying limit [ Section 80G(2) ] Donee Amount of Deduction Donation without any qualifying limit [ Section 80G(2)(a) ] ( i ) the National Defence Fund set up by the Central Government; or 100% ( ii ) the Jawaharlal Nehru Memorial Fund referred to in the Deed of Declaration of Trust adopted by the National Committee at its meeting held on the 17th day of August, 1964; or [ omitted by F.A. 2023 w.e.f. A.Y. 01 st April 2024 ] 50% ( iii ) the Prime Minister's Drought Relief Fund; or 100% ( iiia ) the Prime Minister's National Relief Fund; or the Prime Minister s Citizen Assistance and Relief in Emergency Situations Fund (PM CARES FUND) or 100% ( iiiaa ) the Prime Minister's Armenia Earthquake Relief Fund; or 100% ( iiiab ) the Africa (Public Contributions - India) Fund; or 100% ( iiib ) the National Children's Fund; or 100% ( iiic ) the Indira Gandhi Memorial Trust, the deed of declaration in respect whereof was registered at New Delhi on the 21st day of February, 1985; or [ omitted by F.A. 2023 w.e.f. A.Y. 01 st April 2024 ] 50% ( iiid ) the Rajiv Gandhi Foundation, the deed of declaration in respect whereof was registered at New Delhi on the 21st day of June, 1991; or [ omitted by F.A. 2023 w.e.f. A.Y. 01 st April 2024 ] 50% ( iiie ) the National Foundation for Communal Harmony; or 100% ( iiif ) a University or any educational institution of national eminence as may be approved by the prescribed authority in this behalf; or 100% ( iiig ) the Maharashtra Chief Minister's Relief Fund during the period beginning on the 1st day of October, 1993 and ending on the 6th day of October, 1993 or to the Chief Minister's Earthquake Relief Fund, Maharashtra; or 100% ( iiiga ) any fund set up by the State Government of Gujarat exclusively for providing relief to the victims of earthquake in Gujarat; or 100% ( iiih ) any Zila Saksharta Samiti constituted in any district under the chairmanship of the Collector of that district for the purposes of improvement of primary education in villages and towns in such district and for literacy and post-literacy activities. 100% ( iiiha ) the National Blood Transfusion Council or to any State Blood Transfusion Council which has its sole object the control, supervision, regulation or encouragement in India of the services related to operation and requirements of blood banks. 100% ( iiihb ) any fund set up by a State Government to provide medical relief to the poor; or 100% ( iiihc ) the Army Central Welfare Fund or the Indian Naval Benevolent Fund or the Air Force Central Welfare Fund established by the armed forces of the Union for the welfare of the past and present members of such forces or their dependants; or 100% ( iiihd ) the Andhra Pradesh Chief Minister's Cyclone Relief Fund, 1996; or 100% ( iiihe ) the National Illness Assistance Fund; or 100% ( iiihf ) the Chief Minister's Relief Fund or the Lieutenant Governor's Relief Fund in respect of any State or Union territory, as the case may be : 100% ( iiihg ) the National Sports Fund to be set up by the Central Government; or 100% ( iiihh ) the National Cultural Fund set up by the Central Government; or 100% ( iiihi ) the Fund for Technology Development and Application set up by the Central Government; or 100% ( iiihj ) the National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities constituted under section 3(1) of the National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities Act, 1999; or 100% (iiihk) the Swachh Bharat Kosh, set up by the Central Government, other than the sum spent by the assessee in pursuance of Corporate Social Responsibility under of section 135(5) of the Companies Act, 2013; or 100% (iiihl) the Clean Ganga Fund, set up by the Central Government, where such assessee (i.e. Donor) is a resident and such sum is other than the sum spent by the assessee in pursuance of Corporate Social Responsibility under of section 135(5) of the Companies Act, 2013; or 100% (iiihm) the National Fund for Control of Drug Abuse constituted under section 7A of the Narcotic Drugs and Psychotropic Substances Act, 1985 ; or 100% Any sums paid by the assessee, during the period beginning on the 26th day of January, 2001 and ending on the 30th day of September, 2001, to any trust, institution or fund to which this section applies for providing relief to the victims of earthquake in Gujarat. [ Section 80G(2)(d) read with section 80G(5C) ] Section 80G(5C) This section applies in relation to amounts referred to in clause ( d ) of sub-section (2) only if the trust or institution or fund is established in India for a charitable purpose and it fulfils the following conditions, namely :- ( i ) it is approved in terms of clause ( vi ) of sub-section (5); ( ii ) it maintains separate accounts of income and expenditure for providing relief to the victims of earthquake in Gujarat; ( iii ) the donations made to the trust or institution or fund are applied only for providing relief to the earthquake victims of Gujarat on or before the 31st day of March, 2004 ; ( iv ) the amount of donation remaining unutilised on the 31st day of March, 2004 is transferred to the Prime Minister's National Relief Fund on or before the 31st day of March, 2004 ; ( v ) it renders accounts of income and expenditure to such authority and in such manner as may be prescribed, on or before the 30th day of June, 2004 . 100% II. Donation with qualifying limit for 100% deduction Donation to Government or any approved local authority, institution or association to be utilized for promoting family planning. [ Section 80G(2)(a)(v) ] Any sums paid by the assessee, being a company , in the previous year as donations to Indian Olympic Association or to any other association or institution established in India and notified by central government for The development for infrastructure for sports games; or The sponsorship of sports and games, in India. [ Section 80G()(c) ] III. Donation with qualifying limit for 50% deduction Any other fund or any institution to which satisfied conditions mentioned in section 80G(5) [ Section 80G(2)(a)(iv) read with Section 80G(5) ] Donation to the Government or to any such local authority, institution or association as may be approved in this behalf by the Central Government, to be utilised for the purpose of promoting family planning; [ Section 80G(2)(a)(vii) ] Donation to an authority constituted in India by or under any law enacted either for the purpose of dealing with and satisfying the need for housing accommodation or for the purpose of planning, development or improvement of cities, towns and villages, or for both ; [ Section 80G(2)(a)(vi) ] Donation to any corporation referred to in clause (26BB) of section 10 for promoting the interest of minority community; or [ Section 80G(2)(a)(via) ] any sums paid by the assessee in the previous year as donations for the renovation or repair of any such temple, mosque, gurdwara, church or other place as is notified by the Central Government in the Official Gazette to be of historic, archaeological or artistic importance or to be a place of public worship of renown throughout any State or States. [ Section 80G(2)(b) ] IV. Threshold limit of deduction The maximum amount of deduction available under clause II III above is 10% of the Adjusted Gross Total Income. [ Section 80G(4) ] Mode of Payment: Donation can be given in cash or cheque or draft. However, no deduction shall be allowed in respect of donation in cash of an amount exceeding ₹ 10,000 ( for the AY 2013-14 to 2017-18) or Rs. 2,000/- (From the AY 2018-19 onwards). [ Section 80G(5D) ] The assessee has to produce the proof of payment before claiming such deduction. Note : Application for Approval and order of Approval to PCIT/CIT [ Amendment by FA 2020 , w.e.f. 01.04.2021 ] a) An entity already approved shall be required to apply for approval in Form 10A within 3 months from 01.04.2021, Such approval shall be valid for 5 Years b) Where Insitituton or fund is approved and period of such approval is due to expire, the application for renewal of approval in Form 10AB should be made atleast 6 months prior to expiry of approval. c) An entity making fresh application/First time approval shall make application in Form 10A u/s 80G shall be provisional approved for 3 years without detailed enquires, However, Subsequent approval shall be make before expiry of 6 months of provisional approval in Form 10AB. Other important Points In order to be eligible for deduction under section 80G donations need not necessarily come out of income chargeable to tax and that too of the previous year concerned. [ PARKSIDE HOLDINGS LTD. VERSUS DEPUTY COMMISSIONER 2001 (6) TMI 195 - ITAT MADRAS-B ] Filling statement of donation by the donee to cross check claim of donation by donor w.e.f. 1st October 2020 , an entity which gets under section 80G(5)(vi) is required to upload a statement of donation in prescribed form to the prescribed authority. further it is required to give a certificate of donation to the donor in prescribed form. The donor will get deduction under section 80G on the basis of statement of donation submitted by the donee-entity. if donee entity does not submit the statement of donation or correction statement to rectify any mistake, it is liable to fee/penalty under section 234G . Where a deduction under this section is claimed and allowed for any assessment year in respect of any sum specified in sub-section (2), the sum in respect of which deduction is so allowed shall not qualify for deduction under any other provision of this Act for the same or any other assessment year. [ Section 80G(5A) ] As per section 80G(2)(a)(iv) any other fund or any institution to which satisfied conditions mentioned in section 80G(5) [ Section 80G(5) ] This section applies to donations to any institution or fund referred to in sub-clause ( iv ) of section 80G(2)(a), only if it is established in India for a charitable purpose and if it fulfils the following conditions, namely :- ( i ) where the institution or fund derives any income, such income would not be liable to inclusion in its total income under the provisions of sections 11 and 12 or clause ( 23AA ) or clause ( 23C ) of section 10 : Provided that where an institution or fund derives any income, being profits and gains of business, the condition that such income would not be liable to inclusion in its total income under the provisions of section 11 shall not apply in relation to such income, if- ( a ) the institution or fund maintains separate books of account in respect of such business; ( b ) the donations made to the institution or fund are not used by it, directly or indirectly, for the purposes of such business; and ( c ) the institution or fund issues to a person making the donation a certificate to the effect that it maintains separate books of account in respect of such business and that the donations received by it will not be used, directly or indirectly, for the purposes of such business ; ( ii ) the instrument under which the institution or fund is constituted does not, or the rules governing the institution or fund do not, contain any provision for the transfer or application at any time of the whole or any part of the income or assets of the institution or fund for any purpose other than a charitable purpose; ( iii ) the institution or fund is not expressed to be for the benefit of any particular religious community or caste; (iv) in any other case, where activities of the institution or fund have (A) not commenced, at least one month prior to the commencement of the previous year relevant to the assessment year from which the said approval is sought; (B) commenced and where no income or part thereof of the said institution or fund has been excluded from the total income on account of applicability of sub-clause (iv) or (v) or (vi) or (via) of clause (23C) of section 10 or section 11 or section 12 for any previous year ending on or before the date of such application, at any time after the commencement of such activities: ( v ) the institution or fund is either constituted as a public charitable trust or is registered under the Societies Registration Act, 1860, or under any law corresponding to that Act in force in any part of India or under section 25 of the Companies Act, 1956, or is a University established by law, or is any other educational institution recognised by the Government or by a University established by law, or affiliated to any University established by law, or is an institution financed wholly or in part by the Government or a local authority; ( vi ) in relation to donations made after the 31st day of March, 1992, the institution or fund is for the time being approved by the Principal Commissioner or Commissioner; (vii) where any institution or fund had been approved under clause (vi) for the previous year beginning on the 1st day of April, 2007 and ending on the 31st day of March, 2008, such institution or fund shall, for the purposes of this section and notwithstanding anything contained in the proviso to clause (15) of section 2, be deemed to have been,- (a) established for charitable purposes for the previous year beginning on the 1st day of April, 2008 and ending on the 31st day of March, 2009; and (b) approved under the said clause (vi) for the previous year beginning on the 1st day of April, 2008 and ending on the 31st day of March, 2009. (viii) the institution or fund prepares such statement for such period as may be prescribed and deliver or cause to be delivered to the prescribed income-tax authority or the person authorised by such authority such statement in such form and verified in such manner and setting forth such particulars and within such time as may be prescribed: Provided that the institution or fund may also deliver to the said prescribed authority, a correction statement for rectification of any mistake or to add, delete or update the information furnished in the statement delivered under this sub-section in such form and verified in such manner as may be prescribed; and (ix) the institution or fund furnishes to the donor, a certificate specifying the amount of donation in such manner, containing such particulars and within such time from the date of receipt of donation, as may be prescribed: Provided that the institution or fund referred to in clause (vi) shall make an application in the prescribed form and manner to the Principal Commissioner or Commissioner, for grant of approval,- (i) where the institution or fund is approved under clause (vi) [as it stood immediately before its amendment by the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020, within three months from the 1st day of April, 2021; (ii) where the institution or fund is approved and the period of such approval is due to expire, at least six months prior to expiry of the said period; (iii) where the institution or fund has been provisionally approved, at least six months prior to expiry of the period of the provisional approval or within six months of commencement of its activities, whichever is earlier; (iv) in any other case, at least one month prior to commencement of the previous year relevant to the assessment year from which the said approval is sought: Provided further that the Principal Commissioner or Commissioner, on receipt of an application made under the first proviso, shall,- (i) where the application is made under clause (i) of the said proviso, pass an order in writing granting it approval for a period of five years; (ii) where the application is made under clause (ii) or clause (iii) or sub-clause (B) of clause (iv) of the said proviso,- (a) call for such documents or information from it or make such inquiries as he thinks necessary in order to satisfy himself about- (A) the genuineness of activities of such institution or fund; and (B) the fulfilment of all the conditions laid down in clauses (i) to (v); (b) after satisfying himself about the genuineness of activities under item (A), and the fulfilment of all the conditions under item (B), of sub-clause (a),- (A) pass an order in writing granting it approval for a period of five years; or (B) if he is not so satisfied, pass an order in writing, (I) in a case referred to in clause (ii) or clause (iii) of the first proviso, rejecting such application and cancelling its approval; or (II) in a case referred to in sub-clause (B) of clause (iv) of the first proviso, rejecting such application, after affording it a reasonable opportunity of being heard; (iii) where the application is made under sub-clause (A) of clause (iv) of the said proviso or the application is made under clause (iv) of the said proviso as it stood immediately before its amendment vide the Finance Act, 2023, pass an order in writing granting it approval provisionally for a period of three years from the assessment year from which the approval is sought; and send a copy of such order to the institution or fund: the order under clause (i), sub-clause (b) of clause (ii) and clause (iii) of the second proviso shall be passed in such form and manner as may be prescribed, before expiry of the period of three months, six months and one month, respectively, calculated from the end of the month in which the application was received: the approval granted under the second proviso shall apply to an institution or fund, where the application is made under- (a) clause (i) of the first proviso, from the assessment year from which approval was earlier granted to such institution or fund; (b) clause (iii) of the first proviso, from the first of the assessment years for which such institution or fund was provisionally approved; (c) in any other case, from the assessment year immediately following the financial year in which such application is made. Section 80G(5B) Notwithstanding anything contained in clause ( ii ) of section 80G(5) and Explanation 3 , an institution or fund which incurs expenditure, during any previous year, which is of a religious nature for an amount not exceeding five per cent of its total income in that previous year shall be deemed to be an institution or fund to which the provisions of this section apply . Section 80G(5E) All applications, pending before the Commissioner on which no order has been passed under section 80G(5)(vi) before the date on which this sub-section has come into force, shall be deemed to be applications made under clause (iv) of the first proviso to section 80G(5) on that date. Important Explanation for this section 1 - An institution or fund established for the benefit of Scheduled Castes, backward classes, Scheduled Tribes or of women and children shall not be deemed to be an institution or fund expressed to be for the benefit of a religious community or caste within the meaning of clause ( iii ) of section 80G(5). 2 - For the removal of doubts, it is hereby declared that a deduction to which the assessee is entitled in respect of any donation made to an institution or fund to which sub-section (5) applies shall not be denied merely on either or both of the following grounds, namely :- ( i ) that, subsequent to the donation, any part of the income of the institution or fund has become chargeable to tax due to non- compliance with any of the provisions of section 11, section 12 or section 12A ; ( ii ) that, under clause ( c ) of section 13(1), the exemption under section 11 or section 12 is denied to the institution or fund in relation to any income arising to it from any investment referred to in clause ( h ) of section 13(2) where the aggregate of the funds invested by it in a concern referred to in the said clause ( h ) does not exceed 5% of the capital of that concern . 2A - For the removal of doubts, it is hereby declared that claim of the assessee for a deduction in respect of any donation made to an institution or fund to which the provisions of sub-section (5) apply, in the return of income for any assessment year filed by him, shall be allowed on the basis of information relating to said donation furnished by the institution or fund to the prescribed income-tax authority or the person authorised by such authority, subject to verification in accordance with the risk management strategy formulated by the Board from time to time. 3 - In this section, charitable purpose does not include any purpose the whole or substantially the whole of which is of a religious nature. 4 - For the purposes of this section, an association or institution having as its object the control, supervision, regulation or encouragement in India of such games or sports as the Central Government may, by notification in the Official Gazette, specify in this behalf, shall be deemed to be an institution established in India for a charitable purpose. 5 - For the removal of doubts, it is hereby declared that no deduction shall be allowed under this section in respect of any donation unless such donation is of a sum of money.
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