Any donations that are made towards rural development and scientific research can be claimed under Section 80G. However, you will not be eligible to claim the deduction if you have any income or loss from a profession or a business.
Donations towards rural development and scientific research can be made via cash (maximum of Rs.2,000), draft, or cheque. You can claim the entire amount under Section 80GG.
What is Section 80G of the Income Tax Act?
Section 80G of the Income Tax Act provides for a deduction for donations made to certain charitable institutions or funds. The deduction is available to individuals as well as companies.
The deduction under section 80G can be claimed on the amount donated to eligible institutions or funds. The deduction can be claimed up to a maximum of 50% or 100% of the donated amount, depending on the institution or fund to which the donation under 80G has been made.
However, it is important to note that not all donations under 80G are eligible for deduction under section 80G. Only donations made to certain specified funds or institutions are eligible for deduction. It is, therefore, important to check whether the institution or fund to which the donation has been made is eligible for deduction under section 80G.
To claim the deduction under section 80G, the taxpayer must obtain a receipt or 80G deduction limit certificate from the institution or fund to which the donation has been made.
The receipt should contain the name and address and PAN no.of the institution or fund, the amount donated, and the registration number of the institution or fund under section 80G.
Eligibility to Claim Deduction Under Section 80G
Both company and non-company can claim a deduction under Section 80G of the Income Tax Act for donations made to eligible charitable institutions or funds.
The following persons can claim deduction under section 80G –
- Individuals
- Companies
- Firms
- Hindu Undivided Family (HUF)
- Non-Resident Indian (NRI)
- Any other person
What Type of Donations are Eligible for the Deduction Under Section 80G?
To claim a deduction under Section 80G, the donation must be in the form of money and not goods or services. The deduction can only be claimed for cash, cheque, or electronic transfer donations.
In addition, it is important to note that donations made in cash exceeding Rs. 2,000 will not be eligible for the deduction under Section 80G. Donors should ensure that they receive a receipt for the donation. The receipt should specify the amount donated, the name and address of the charitable institution or fund, and the registration number of the institution or fund under Section 80G.
Donors should also check the eligibility and maximum 80G deduction limit for each institution or fund before donating. It is important to note that the deduction limit and eligibility criteria can vary depending on the institution or fund to which the donation has been made.
FAQs
How to Claim a Deduction Under Section 80G for Donations Made to Ayodhya Ram Mandir Trust?
People worldwide donated to the Ram Mandir through the Shri Ram Janmabhoomi Teerth Kshetra Trust, registered under Section 80G. This provision in the Indian Income Tax Act allows donors to claim deductions.
- 50% of the amount donated for renovation/repair of the Mandir to Shri Ram Trust is eligible for deduction under Section 80G.
- If the total amount donated to Shri Ram Trust exceeds 10% of your adjusted gross total income (GTI), any excess amount beyond the 10% limit will not be eligible for deduction.
Points to be noted while claiming deduction
- Secure a valid Ram Mandir donation receipt from Shri Ram Trust.
- Donations can be made via drafts, cheques, or online modes.
- Cash donations exceeding INR 2,000 are not deductible.
- In-kind donations are not accepted.
- Donors opting for the new tax regime cannot claim benefits.
- Contributions must be designated for temple renovation/repair to qualify for deductions.
- Provide details of the donation in Schedule 80G of your ITR form.
How to Claim the Deduction Under Section 80G While Filing ITR?
Tax calculation or tax liability is computed on the net taxable income of the taxpayer. The net taxable income is calculated after subtracting all the deductions that a taxpayer is eligible for from his/her gross total income. This means that the deduction under Section 80G will be deducted from the gross total income. Gross income is the sum of income from all sources of income, such as salary, dividend income, capital gains, interest income, rental income, etc.
Now the question is how much amount of deductions can be claimed under Section 80G. This deduction ranges from 50% to 100% of the amount donated. Donations to certain institutions qualify for a full deduction of either 100% or 50% without any qualifying limit.
To claim the deductions under Section 80 G, one needs to provide the details of their donations in’ Schedule 80G” in the ITR form. Tables A, B, C, and D are included in the schedule. These tables each correspond to a different category of charitable institution.
As per the latest change, a new column has been added under ‘Table D’ of ITR forms where disclosure of the ARN (donation reference number) is required to be entered. This one is for those entities where a 50% deduction is allowed, subject to the qualifying limit.
Along with mentioning the information under ‘Schedule 80G’, it is important to separately mention the total amount of deduction claimed under Section 80G if the taxpayer is filling the ITR forms 2 and 3.
To claim the deduction under section 80G, you need to fill in the following details in the Income Tax Return –
- Name of the Donee
- PAN of the Donee
- Address of the Donee
- The amount and breakup of contributions are in cash and other mode.
- The amount of deduction
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