Certificate for Section 80G Deduction

Certificate for Section 80G Deduction

Section 80G lets you deduct charitable donations from your taxable income — 100% for government relief funds or 50% for most approved institutions, subject to a 10% of adjusted gross total income ceiling. Since AY 2023-24, the deduction is valid only if your donee institution files Form 10BD by 31 May and you hold a system-generated Form 10BE certificate. For AY 2027-28 (FY 2026-27), this digital compliance chain is mandatory, is fully integrated with your AIS, and is enforced at Section 143(1) intimation processing.

How Section 80G Works in AY 2027-28 (FY 2026-27)

Section 80G of the Income-tax Act 1961 allows an individual, HUF, firm, or company to reduce taxable income by amounts donated to approved charitable funds and institutions. The deduction is structured in four tiers:

Tier 1 — 100% deduction, no qualifying limit: Donations to the Prime Minister's National Relief Fund (PMNRF), PM CARES Fund, National Defence Fund (NDF), National Disaster Response Fund (NDRF), National Foundation for Communal Harmony, and other specifically notified central and state government funds. Your deduction here is uncapped — donate Rs. 5,00,000, deduct Rs. 5,00,000.

Tier 2 — 100% deduction, subject to qualifying limit: A narrow list including the Jawaharlal Nehru Memorial Fund and Indira Gandhi Memorial Trust. The 100% rate applies but only up to the qualifying limit.

Tier 3 — 50% deduction, no qualifying limit: Contributions to the Prime Minister's Drought Relief Fund and a handful of other specified funds.

Tier 4 — 50% deduction, subject to qualifying limit: The largest category by volume: most registered NGOs, trusts, religious bodies, and educational institutions approved under Section 12AB or Section 10(23C).

What "qualifying limit" actually means

The qualifying limit is 10% of your Adjusted Gross Total Income (AGTI). AGTI is not your Gross Total Income. Compute it as:

AGTI = Gross Total Income − Long-term capital gains − Short-term capital gains taxed at special rates (Sections 111A, 112, 112A) − Income under Sections 115A to 115D − All Chapter VI-A deductions claimed *other than* Section 80G

Tier 2 and Tier 4 donations are capped at 10% of this AGTI. Any excess is permanently forfeited — there is no carry-forward of unclaimed 80G amounts to the next year.

Section 80G and the new tax regime

Section 80G is not available if you have opted for the new tax regime under Section 115BAC. The new regime, which became the default from AY 2024-25, strips out most Chapter VI-A deductions. The only deductions preserved are Section 80CCD(2) (employer NPS contribution), Section 80JJAA (new employment generation), and Section 80CCH. Section 80G is not among them. If you filed returns under the new regime and inadvertently claimed 80G, expect a disallowance demand with interest under Section 220(2).

The Compliance Chain: Form 10BD and Form 10BE

Before AY 2023-24, a paper receipt with a rubber-stamped Section 80G registration number was enough. That regime is gone. The Department replaced it with a two-document system that links the institution's declaration to the donor's AIS in real time.

Form 10BD — the institution's side

Form 10BD is a statement filed by the donee institution on the income-tax e-filing portal (incometax.gov.in). It is the institution's formal declaration of every qualifying donation received during the financial year. For each donor, the institution reports:

• Donor name, PAN or Aadhaar
• Donation amount and date
• Mode of payment (cash / cheque / electronic transfer)
• Applicable deduction category (Tier 1 through Tier 4)

Filing deadline for FY 2026-27: 31 May 2027. Miss this date and the institution faces a mandatory fee under Section 234G at Rs. 200 per day for each day of delay, capped at the aggregate donation amount reported. A 60-day delay on a Rs. 10,00,000 donation statement costs Rs. 12,000 in fee alone — before considering the downstream damage to donor relationships.

Form 10BE — the certificate you receive as a donor

Once the institution files Form 10BD, the portal auto-generates Form 10BE. The institution downloads and issues it to each donor. This is not a self-drafted receipt — it is a system-generated document with a certificate serial number, the institution's Unique Registration Number (URN), and the donor's PAN already embedded.

The portal's AIS (Annual Information Statement) is populated directly from Form 10BD data. When your donee institution files correctly, the donation appears under "Other Information" in your AIS and pre-fills Schedule 10BE in the ITR utility. If the institution has not filed, nothing pre-fills, you have no certificate, and a manual claim is a red flag at processing.

Eligibility Checks You Must Do Before Donating

These checks take five minutes and can save months of correspondence with the tax department.

1. Verify current 80G registration. Log in to incometax.gov.in → Verify Tax Compliance → Verify 80G / 12A Registration. Enter the institution's PAN. The portal returns the approval status, section code, and validity end date. Do this on the day you donate, not six months later.

1. Ask for the institution's URN. Every institution registered under the revised framework holds a URN. If the institution cannot give you this number, it cannot file Form 10BD, it cannot generate Form 10BE, and your deduction is dead on arrival. Treat a missing URN as a hard stop.

1. Check approval validity. Under the Finance Act 2020 revision, 80G approvals are granted for five years and must be actively renewed. An institution approved until 31 March 2025 that has not renewed its registration has been invalid since 1 April 2025. Certificates issued after expiry are worthless regardless of how official they look.

1. Pay through banking channels for amounts above Rs. 2,000. Cash donations exceeding Rs. 2,000 are statutorily disqualified — the entire donation, not just the excess. Use cheque, demand draft, NEFT, RTGS, UPI, debit card, or credit card. Keep the payment reference and bank statement extract.

1. Give your correct PAN. Form 10BE is issued against your PAN. If you give a wrong number — even a transposition error — the certificate will not match your AIS entry, and the mismatch will surface during Section 143(1) processing.

Step-by-Step: Claiming 80G in Your ITR

For AY 2027-28, ITR filing opens on 1 April 2027. The non-audit deadline is 31 July 2027.

1. Collect Form 10BE after 31 May 2027. Chase each donee institution by email or phone. You can also check under e-File → Income Tax Forms → View Filed Forms on the portal — this shows certificates where your PAN appears in the donee's Form 10BD.

1. Open AIS and check donations. Log in → e-File → AIS/TIS → Annual Information Statement → scroll to "Other Information" → look for entries tagged as donation. These come from the donee's Form 10BD.

1. Run a three-way reconciliation before touching Schedule 80G:
2. Column A: AIS donation entries
3. Column B: Form 10BE certificates you hold
4. Column C: What you plan to enter in Schedule 80G

All three must agree. Resolve any discrepancy before submitting.

1. Enter Schedule 80G in your ITR. For each certificate, enter: donee name, donee PAN, URN, donation amount, and the correct deduction category. The ITR utility calculates the qualifying limit and auto-caps Tier 2 and Tier 4 claims.

1. Verify the computed deduction against your own calculation. A category entry error — e.g., marking a Tier 4 donation as Tier 1 — will be caught at Section 143(1) and result in partial disallowance.

1. E-verify immediately. E-verify within 30 days of upload — ideally the same day using Aadhaar OTP. An unverified ITR is treated as not filed.

Worked Example: Calculating Your Section 80G Deduction

Profile: Anita, 38, senior manager, Bengaluru. FY 2026-27, old tax regime.

Donations:

• PM CARES Fund (Tier 1 — 100%, no limit): Rs. 1,00,000
• Section 12AB registered NGO running a school (Tier 4 — 50%, qualifying limit): Rs. 4,00,000

Qualifying limit: 10% × Rs. 18,55,000 = Rs. 1,85,500

The Tier 4 donation is Rs. 4,00,000 — but only Rs. 1,85,500 is within the qualifying limit. The remaining Rs. 2,14,500 is permanently forfeited.

Deduction computed:

Tax saved (30% slab + 4% cess): Rs. 1,92,750 × 31.2% = Rs. 60,138

The practical lesson: Anita donated Rs. 5,00,000 but can claim only Rs. 1,92,750. Had she spread the NGO donation across two financial years — Rs. 2,00,000 each — she would have used both qualifying limits and claimed a deduction on a higher share of the total.

How to Read a Form 10BE Certificate — Field by Field

Form 10BE is one page. Every field matters. Verify each before filing your ITR:

• Certificate serial number. A unique system reference — quote this in any correspondence with the institution or the Department.
• Donee name, PAN, and URN. Cross-check the URN on the portal. A valid URN assigned under the revised regime follows a specific alphanumeric format; a blank or invalid URN means the institution's registration is suspect.
• Validity of Section 80G approval. The approval shown must have been valid on the date of your donation, not merely on the date the certificate was generated. Post-expiry certificates are invalid.
• Donor name and PAN. One character wrong here creates an AIS mismatch. If incorrect, return the certificate to the institution and request a corrected one before the ITR deadline.
• Donation amount, date, and mode. Amount must match your bank record. Mode must say "electronic" or "cheque" for amounts above Rs. 2,000.
• Deduction percentage. Not all institutions state this explicitly. If yours does not, check the institution's approval letter on the portal — the approval specifies the tier. Do not assume 100%; an unverified assumption of the wrong tier will lead to partial disallowance.

Common Mistakes That Get 80G Claims Disallowed

These are the most recurring causes of disallowance seen in Section 143(1) intimations and assessment proceedings:

• Donating to an institution with expired registration. Five-year approvals are not auto-renewed. Verify on the portal on the date of donation.
• Cash donations above Rs. 2,000. Even Rs. 2,001 in cash disqualifies the entire donation — not just the Rs. 1 excess.
• Using paper receipts instead of Form 10BE. Old-format stamped receipts are not valid from AY 2023-24 onwards. If the institution cannot issue Form 10BE, your claim has no documentary support the system will accept.
• Claiming 80G under the new tax regime. Filing under Section 115BAC and entering Schedule 80G will result in an automatic disallowance at CPC processing.
• CSR contributions claimed as 80G. Section 37(1) bars deduction for CSR expenditure. The Explanation to Section 80G separately prohibits an 80G claim for amounts mandatorily spent under Section 135. Even if the institution issues Form 10BE in the company's name, the claim is invalid if the donation was made from the CSR budget.
• Donations to foreign charities. Section 80G extends only to Indian entities. Donations routed overseas — even to internationally operating Indian-registered trusts that hold foreign assets — need careful legal review before an 80G claim is made.
• Wrong PAN supplied to the institution. Form 10BE and AIS are both PAN-linked. A single digit error creates a mismatch you cannot fix quickly enough before the ITR deadline.
• ITR entry amount different from Form 10BE. Even a Rs. 500 difference triggers a flag under Section 143(1)(a) and may delay your refund by weeks.

What Happens When Form 10BD Is Filed Late — Penalties for Institutions

Institutions that miss the 31 May deadline for FY 2026-27 face Section 234G: a mandatory late filing fee of Rs. 200 per day for each day of default, up to the aggregate donation amount reported.

Penalty illustration: A mid-sized NGO files Form 10BD on 20 July 2027 — 50 days after the 31 May deadline — and reports total donations of Rs. 25,00,000.

Fee = 50 days × Rs. 200 = Rs. 10,000

That Rs. 10,000 fee is payable at the time of filing the belated Form 10BD. But the real cost is that 80+ donors either delayed their ITR or filed without Form 10BE and face disallowance risk. The institution's fundraising credibility takes a compounding hit.

Separately, Section 271K gives the Assessing Officer power to levy a penalty between Rs. 10,000 and Rs. 1,00,000 for failure to file the statement or issue the certificate. This is distinct from the 234G fee and requires a show-cause hearing — but it is live risk for institutions that are habitually late.

Institutions should build Form 10BD filing into their year-end calendar in April, not wait for May. Donor data — PAN, amounts, modes — should be collected and validated at the time of each donation, not scrambled in May.

Reconciling Your Claim with AIS and TIS

The Annual Information Statement (AIS) and Taxpayer Information Summary (TIS) are your pre-filing compliance dashboard. Here is how to use them purposefully for 80G:

Check AIS in stages, not just once. AIS is updated throughout the year as institutions file Form 10BD. An institution that made a bulk filing in April 2027 will have its data in your AIS before you start ITR prep; one that files on 30 May 2027 will not appear until after that date. Do not check once and assume completeness.

Use the Feedback tool proactively. If AIS shows a donation amount that does not match your records — say Rs. 22,000 when you donated Rs. 25,000 — use the Feedback function in AIS to flag the mismatch. The institution can then file a correction to Form 10BD. This is far easier to fix before you file your ITR than after a 143(1) intimation.

Filing with a Form 10BE but no AIS entry. If you hold Form 10BE but the donation is absent from AIS (because the institution filed Form 10BD after you filed your ITR), you may still claim the deduction. Form 10BE is the statutory certificate. However, be prepared for a Section 143(1)(a) flag. Have the Form 10BE PDF and bank payment proof ready to respond within 15–30 days of the intimation.

Retention rule. Store Form 10BE PDFs for at least eight years from the end of the relevant assessment year. For FY 2026-27 (AY 2027-28), retain until at least 31 March 2036 — this covers the reopening window under Sections 148 and 148A.

A Note for Corporate Donors

The rules above apply to all taxpayers, but companies carry an extra compliance layer.

Keep CSR and voluntary donation ledgers strictly separate. A corporate donation charged to the CSR budget — even inadvertently — cannot generate an 80G deduction regardless of the Form 10BE issued. Before approving any charitable payment, finance teams should document whether it is a CSR obligation under Section 135 or a voluntary corporate donation. The distinction must appear in board or finance committee minutes, not just in accounting entries.

Related-party scrutiny. If your company donates to a trust where a director, promoter, or their relative is a trustee, treat it as a potential related-party transaction. For listed companies, this requires additional SEBI compliance disclosures. Document the arm's-length basis before transferring funds.

Form 10BE must carry the company's PAN. Where a director donates personally and the company intends to claim the deduction, it cannot — the certificate must be in the company's name. Establish this with the institution before the payment is made, not afterwards.

Key Takeaways

• Form 10BE is the only valid proof of donation for 80G from AY 2023-24 onwards. Stamped paper receipts are not accepted regardless of what they say.
• Verify the institution's URN and 80G approval validity on the portal before donating — approvals run for five years and must be actively renewed.
• Cash above Rs. 2,000 permanently disqualifies the entire donation. There is no partial credit for the portion paid by banking channel if any part of the donation was in cash above this threshold.
• Section 80G is unavailable under the new tax regime (Section 115BAC). Confirm your regime before entering any amount in Schedule 80G.
• Run a three-way match — AIS, Form 10BE, and your ITR Schedule 80G — before submitting. All three must agree to the rupee.
• Chase donee institutions for their Form 10BD filing confirmation before April-end — if they miss the 31 May deadline, your deduction is in jeopardy even when you have done everything right.
• Corporate donors must keep CSR and voluntary donation documentation rigorously separate. A CSR-tagged payment cannot be reclassified as an 80G-eligible donation even if the institution issues a certificate.