Contributions made to certain relief funds and charitable institutions can be claimed as a deduction under Section 80G of the Income Tax Act. All donations, however, are not eligible for deductions under section 80G. Only donations made to prescribed funds qualify as a deduction.
This deduction can be claimed by any taxpayer - individuals, company, firm or any other person. Donations made are eligible to be claimed as a deduction under Section 80G in all cases except in cases where the donation has been made in kind (eg: food, clothes, medicine etc). In order to claim this deduction, the donor is also required to furnish a proof of payment. A stamped receipt is issued by the recipient trust in this regard, details of which should be mentioned by the taxpayer while filing his Income Tax Return.
In some cases, there is no maximum limit for the deduction which can be claimed for donations made under section 80G. However, in some cases deduction on donations under Section 80G is limited to 10% of the Adjusted Gross Total Income of the taxpayer.
Deduction under section 80G is available only when the contribution is made to specified funds through cheque or draft or cash. However, it is significant to note here that with effect from the assessment year 2018-2019, maximum cash contribution that is allowed as a deduction under section 80G is restricted to INR 2,000/-.
Donations made to political parties can be claimed but not under this section. Section 80GGC offers tax deduction for donations made to political parties.
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