In continuation of its efforts to promote voluntary tax compliance and enhance taxpayer awareness, the Government has released a comprehensive set of clarifications on Section 80G of the Income-tax Act, 1961, under the NUDGE Campaign. The initiative aims to guide taxpayers on the correct understanding of tax deductions available on donations made to eligible charitable institutions, funds and organisations, while ensuring transparency and accuracy in income tax filings.
Section 80G provides for deductions in computing the total income of a taxpayer in respect of donations made to certain specified funds, charitable institutions and approved entities. These clarifications are intended to help taxpayers make informed donations and correctly claim deductions while filing their Income Tax Returns (ITRs).
Structure of Deductions under Section 80G
The deduction under Section 80G is structured on the basis of the nature of the donee and the category of donation. Broadly, donations fall into four categories:
- 100% deduction without any qualifying limit
- 50% deduction without any qualifying limit
- 100% deduction subject to a qualifying limit
- 50% deduction subject to a qualifying limit
For certain categories of donations, the total deduction is capped at 10% of the taxpayer’s Adjusted Gross Total Income (AGTI). Any donation exceeding this limit is not eligible for deduction.
Eligible Donations and Institutions
Donations made to specified national and government funds such as the Prime Minister’s National Relief Fund, Prime Minister’s Citizen Assistance and Relief in Emergency Situations (PM CARES) Fund, National Defence Fund, Clean Ganga Fund, Swachh Bharat Kosh, National Sports Development Fund, and other notified funds are eligible for 100% deduction without any limit.
Certain memorial funds and approved institutions qualify for 50% deduction without limit, while donations to government or local authorities for charitable purposes, approved housing and urban development authorities, family planning programmes, notified religious places of historical importance, and specified sports infrastructure projects qualify for deductions subject to the qualifying limit.
Only donations made to trusts, institutions or funds specifically listed under Section 80G(2) or those registered and approved under Section 80G by the Income Tax Department are eligible for deduction. Taxpayers are advised to verify the eligibility status of the donee institution before making donations.
Eligibility of Donors
Any taxpayer, including individuals, Hindu Undivided Families (HUFs), companies, firms or other entities, having taxable income and making eligible donations, can claim deduction under Section 80G, subject to prescribed conditions.
Key Compliance Conditions
- Deduction is allowed only for monetary donations; donations in kind do not qualify.
- Cash donations exceeding ₹2,000 are not eligible for deduction. Payments must be made through cheque, draft or electronic modes.
- A donor cannot claim deduction for the same donation under more than one provision of the Income-tax Act.
- Deduction under Section 80G cannot be claimed if the taxpayer opts for the new tax regime under section 115BAC.
- Unutilised or excess donations cannot be carried forward to subsequent assessment years.
Verification and Reporting Mechanism
To strengthen transparency, certain categories of donee institutions are mandatorily required to furnish donation details to the Income Tax Department through Form 10BD. Based on this, donors are issued a Donation Certificate in Form 10BE, which contains essential details such as the name and PAN of the donee, registration number, and amount donated.
The deduction claimed by the donor in the ITR must match the information submitted by the donee. Mismatches may result in denial of deduction.
Institutional Eligibility Requirements
Institutions seeking approval under Section 80G must fulfil specific conditions, including:
- Income being exempt under relevant provisions of the Act,
- Maintenance of regular accounts,
- Registration under applicable laws,
- Non-religious and non-caste-based objectives,
- Approval by the Principal Commissioner or Commissioner of Income Tax.
Donations made after the expiry or cancellation of an institution’s 80G registration are not eligible for deduction.
Advisory to Taxpayers
Taxpayers are encouraged to verify the deduction category, registration validity and compliance status of the donee institution before making donations. Updated information on approved institutions is available on the official website of the Income Tax Department.
The NUDGE Campaign reflects the Government’s commitment to fostering trust, transparency and voluntary compliance, while encouraging genuine charitable contributions towards national development and social welfare causes.
The Complete FAQs can be accessed at: https://www.incometax.gov.in/iec/foportal/sites/default/files/2025-12/FAQs_80G_Section_mentioned_(final)_to_upload.pdf#
