Section 80G of the Income Tax Act, 1961 refers to one of the major the deduction in respect of donation to charitable institutions, few specific funds, etc. wherein the taxpayer gets the exemption either partly or fully of the amount donated from tax liability. The deduction can be claimed by any person or taxpayer i.e. individual, company, firm, body corporate or any other person, however the donation amount will not qualify for deduction if exceeds 10% of the Total Gross Income.

Registration under Section 12A of Income Tax is a must to provide the benefit under 80G to the person making the donation. The NGO may apply for 80G and 12A registration just after the registration as NGO. The NGO should register itself under section 80G to attract the potential donor, then the person or the donor or the organization will get deduction @50% or 100% from their taxable income.

There are 4 criteria of Deduction under Section 80G-

1. 100% deduction without any limit if payment made to Prime Minister relief fund, National Defense Fund.

2. 50% deduction without any limit if payment made to trusts like National Children’s Fund, Prime Minister’s Drought Relief Fund etc.

3. 100% deduction with limit for an approved institution i.e. for promoting and encouraging family planning.

4. 50% deduction with limit which falls under the category of charitable trusts.

Conditions for Registration under Section 80G

1. The NGO should not be working for the benefit of any particular religious community or caste.

2. The NGO must be registered either under the Societies Registration Act or Trust Act or the Companies Act, 2013.

3. The NGO should not be engaged in commercial activity.

4. Donation should be made in the sum of money.

5. Donation more than Rs. 10,000 should be donated through online mode or cheque.

6. The donation received should only be utilized for the said purpose.

7. The Organization should maintain the proper books of accounts and annual returns.

8. The organization must renew the certificate or license as to receive the tax benefits.

How to Claim Deduction for Donation under Section 80G

Make sure the institution is registered by Government to claim under 80G when you are donating. Once donation is successful, keep the receipt with you stating Donor details, PAN of Donee, Registration Number of Donee and enter the details of such donation at the time of filing Income Tax return. The receipt is not required to be attached with the Return to be filed, it is automatically taken on record. It can be donated directly by you or through your employer, if you are employed