Here's how you can avail tax deduction under Section 80G

Most of us are familiar with Section 80C under Income Tax Act as it help us in claiming Rs 1.50 lakh from our total income, but do you know there is Section 80G which also has similar provisons.
 
Under Section 80G, tax exemptions can be claimed by everyone, irrespective of the taxpayer being an individual, company, or a partnership firm.
 
Not only this, even NRIs are eligible to claim benefits under Section 80G, as it has nothing to do with Mutual Funds, Home loans or Insurance.
 
The government introduced Section 80G to motivate Indian citizens to donate by providing them income tax relief. Once a person donates any amount, he or she is eligible to claim the amount donated as deduction when he/she files income tax return.
 
Under IT Act, Section 80G is available for contributions made to certain relief funds and charitable institutions.

Here's what you need to know. Amount of deduction under Section 80G, as per Indiafilings.com and ClearTax.
 
Donations with 100% deduction

Under this category, one can enjoy 100% tax deduction and are not subject to any qualification limit being met.

Schemes that qualify for 100% deduction are -  National Defence Fund, Prime Minister’s National Relief Fund, The National Foundation for Communal Harmony, and National/State Blood Transfusion Council.

Donations with 50% deduction

50% tax deduction can be claimed if donations are made under trusts like Prime Minister’s Drought Relief Fund, National Children’s Fund and Indira Gandhi Memorial Fund.

Donations with 100% deduction (Subjected to 10% of adjusted gross total income)

If a person makes donations to local authorities or government in order to promote family planning and donations to Indian Olympic Association, he would avail deductions under this category.

However, under such situation, only 10% of the donor’s adjusted gross total income is eligible for deductions. Donations which exceed this amount are rounded off to 10%.

Donations with 50% deduction (subjected to 10% of adjusted gross total income)

Under this category, if a person makes donations to any local authority or the government which would then use it for any charitable purpose, he can avail deductions under this category.
 
Similarly, only 10% of the donor’s adjusted gross total income is eligible for deductions. Donations which exceed this amount are capped at 10%.
 
How to claim Section 80G deduction
 
Taxpayers can claim  deduction under Section 80G by submitting details in their ITR filing.
 
One needs to have a  donation receipt issued by the Trust or Charity which received the donation.
 
The receipt provides details like name and address of the Trust or NGO, name of donor, amount donated and registration number of the Trust, as given by the Income Tax Department under Section 80G along with its validity.
 
Apart from this, the taxpayer is also needed to submit a Form 58A under IT Act to claim 100% deduction on a donation, without which the donation will not be eligible for 100% deduction.
 
Form58A will be provided only for certain types of eligible deductions.
 
Trusts and institutions registered under Section 80G are provided with a registration number by the IT Department, and donors should ensure that their receipt contains this number.
 
Registration number needs to be valid on the date of a particular donation. If the donation is made while the Section 80G registration is not valid, the donation would not be eligible for deduction.
 
Mode of payment
 
A taxpayer can claim deduction under Section 80G, when the contribution is made through cheque, draft or cash.
 
Deduction is not applicable for donations made in cash exceeding Rs 10,000.
 
In regards to contributions such as food material, clothes, medicines etc do not qualify for deduction under Section 80G.
 
From FY18 onwards, any donations made in cash exceeding Rs 2000 will not be allowed as deduction. Hence, the donation over Rs 2000 should be made in any mode other than cash to qualify as deduction u/s 80G.