Understand Section 80G deductions for donations — 50% and 100% categories, qualifying limits, the cash payment cap, and mandatory donee registration checks.
Section 80G Donation Deduction Explained: Limits, Categories & Claim Process for FY 2025-26
Donating to a charitable cause feels good, but many taxpayers assume every donation automatically earns them a tax deduction. It does not. Section 80G of the Income Tax Act lays down specific conditions — the recipient organisation must hold valid registration, the donation mode matters, and the percentage you can deduct varies sharply depending on which category the donee falls into.
Since recent amendments tightened the registration and reporting framework for charitable institutions, claiming an 80G deduction today requires more documentation than it used to. This guide breaks down the categories, limits, cash caps, and the paperwork you must collect before you claim a single rupee of deduction on your return.
What Section 80G Covers
Section 80G allows individuals, HUFs, firms, companies, and other categories of taxpayers to claim a deduction for donations made to specified funds, charitable institutions, and relief funds. The deduction is available regardless of the taxpayer's category, but crucially, it is available only under the old tax regime for most standard donations — a point that trips up many first-time filers who default into the new regime.
The deduction is not a flat percentage across the board. Depending on the donee institution, you may be entitled to deduct 100% or 50% of the donated amount, and in several cases, this deduction is further subject to a qualifying limit capped at a percentage of your adjusted gross total income. Understanding which bucket your donation falls into is the first step to claiming it correctly.
Who Can Claim the 80G Deduction
- Resident and non-resident individuals who have made an eligible donation during the financial year
- Hindu Undivided Families (HUFs)
- Partnership firms, LLPs, and companies, subject to the same categorisation rules
- Any other class of assessee, as the section does not restrict eligibility by taxpayer type, only by the nature of the donee and mode of payment
The deduction is claimed against the donor's gross total income and reduces taxable income accordingly, but only donors who opt for the old tax regime can use it — those under the new regime lose this benefit entirely for FY 2025-26 (AY 2026-27), subject to the limited regime-specific rules that apply each year, which you should verify before filing.
The Four Categories of 80G Deduction
Donations under Section 80G are split into four broad categories, based on both the percentage of deduction allowed and whether a qualifying limit applies:
- 100% deduction without qualifying limit — Donations to funds like the National Defence Fund, Prime Minister's National Relief Fund, and certain other government-notified funds qualify for a full deduction with no cap tied to your income.
- 50% deduction without qualifying limit — Certain funds, such as specific government relief and welfare funds notified under this category, allow only half the donated amount as deduction, but without any income-linked ceiling.
- 100% deduction subject to qualifying limit — Donations to government or approved local authorities for promotion of family planning, and donations by companies to specified funds, may qualify for a full deduction, but only up to a qualifying limit (commonly 10% of adjusted gross total income).
- 50% deduction subject to qualifying limit — This is the most common category for everyday donations to registered NGOs, charitable trusts, and religious institutions with valid 80G registration. Only 50% of the donated amount is deductible, and further, this is capped at the qualifying limit (commonly 10% of adjusted gross total income).
The "qualifying limit" itself is computed as a percentage of your adjusted gross total income (gross total income minus certain other deductions and exempt income), so a large donation relative to your income may not be fully deductible even within the correct percentage category. Always verify the current qualifying limit percentage applicable for the year you are filing.
The Cash Donation Cap
One of the strictest conditions under Section 80G concerns the mode of payment:
- Cash donations exceeding ₹2,000 are not eligible for deduction under Section 80G at all. If you donate more than this threshold, the entire excess amount above ₹2,000 is disallowed — not just the deduction percentage, but the underlying eligibility itself.
- To claim deduction on larger donations, payment must be made through banking channels — cheque, demand draft, net banking, UPI, credit/debit card, or other traceable digital modes.
- Donations in kind (clothes, food, medicines, or other goods) do not qualify for 80G deduction at all — only monetary contributions are eligible.
This cap exists specifically to curb bogus donation claims and ensure a verifiable trail, so donors planning larger contributions should always route them through a bank account rather than cash, regardless of how the receiving institution requests payment.
Mandatory Donee Registration and Documentation
This is where the compliance burden has increased significantly in recent years, and it is the single biggest reason genuine donation claims get rejected during processing.
- The donee institution must hold a valid registration under Section 80G at the time the donation is made. Institutions must periodically renew this registration, and an expired or cancelled registration disqualifies donations made after the lapse, even if the institution was validly registered earlier.
- The institution is required to file a statement of donations with the tax department and issue the donor a Form 10BE certificate (or the prevailing equivalent) confirming the donation, which generates an Acknowledgement Reference Number (ARN).
- This ARN and the underlying donation details get reflected in the donor's Annual Information Statement (AIS), and increasingly, the tax department cross-verifies 80G claims against this reported data during return processing.
- A simple donation receipt from the NGO is no longer sufficient on its own — donors should insist on the Form 10BE certificate or the corresponding ARN, since claims lacking this reported data are at high risk of being disallowed or flagged for verification.
Before donating, it is prudent to check the institution's current 80G registration status and validity period, since registrations issued under the newer regime typically run for a fixed number of years and require renewal — a lapsed registration means your donation, however well-intentioned, will not earn you a deduction.
How to Claim the 80G Deduction While Filing
- Verify the donee's 80G registration is active on the date of donation — ask for the registration number and validity period before donating.
- Make the payment through a banking channel if the amount exceeds the cash cap, and retain the payment proof (bank statement, UPI transaction ID, or cheque counterfoil).
- Collect the donation receipt along with the Form 10BE certificate / ARN issued by the institution after it files its statement of donations.
- Classify the donation into the correct category (100%/50%, with or without qualifying limit) based on the donee's notification status — the institution or your tax advisor can confirm this.
- Reconcile with AIS before filing, ensuring the ARN and amount reported by the institution match what you intend to claim.
- Report the deduction under the Chapter VI-A schedule of your ITR, entering the donee's PAN, registration number, and ARN as required by the return utility.
- Retain all documentation — receipt, Form 10BE, and payment proof — for future reference in case of scrutiny.
Old Regime vs New Regime
- Old Tax Regime: Section 80G deduction remains fully available, subject to the category-wise percentage and qualifying limit rules described above.
- New Tax Regime (default from FY 2023-24, continuing into FY 2025-26): Section 80G is not available as a deduction, along with most other Chapter VI-A benefits. Donors who are keen on claiming this deduction must opt for the old regime when filing, and should factor this into their overall regime comparison alongside 80C, 80D, HRA, and home loan interest.
Given that donation amounts are often discretionary and philanthropic in intent rather than tax-driven, donors should still run the numbers: if your total eligible deductions across all sections make the old regime more tax-efficient overall, claiming 80G reinforces that choice. If you have very few other deductions, the new regime's lower slabs might still work out better even without 80G relief — a side-by-side computation is the only reliable way to decide, and slab and rebate figures should be verified for the current assessment year.
Illustrative Examples
Example 1 — Donation to PM relief fund:
An individual donates ₹50,000 to a fund notified for 100% deduction without qualifying limit. The entire ₹50,000 is deductible under the old regime, with no cap tied to income, provided payment was made via bank transfer.
Example 2 — Donation to a registered NGO:
The same individual donates ₹1,00,000 by cheque to a charitable trust with valid 80G registration falling under the 50%-with-qualifying-limit category. Only 50% (₹50,000) is eligible for deduction in principle, and this is further capped at the qualifying limit computed on adjusted gross total income — if the limit works out lower than ₹50,000, only that lower figure is allowed.
Example 3 — Cash donation exceeding the cap:
A donor gives ₹5,000 in cash to a registered NGO. Since this exceeds the ₹2,000 cash cap, the deduction is entirely disallowed for the amount above the cap and, in practice, most tax professionals recommend treating the whole cash donation as ineligible unless routed properly, since only ₹2,000 in cash-based giving retains eligibility.
Example 4 — Donation to unregistered institution:
A well-meaning donor contributes ₹20,000 to a local charitable effort that lacks current 80G registration. Despite the noble intent, no deduction is available at all, since donee registration is a non-negotiable precondition.
Common Pitfalls to Avoid
- Donating in cash above ₹2,000 and losing the deduction on the excess amount entirely.
- Failing to verify the donee's current 80G registration status before donating — a lapsed registration invalidates the claim even if the institution was registered previously.
- Assuming a donation receipt alone is sufficient — without the Form 10BE certificate/ARN reflected in AIS, claims are increasingly disallowed during processing.
- Confusing 100% and 50% categories — many donors assume all donations qualify for full deduction, when most everyday NGO donations fall in the 50%-with-limit category.
- Ignoring the qualifying limit — a large donation relative to income may not be fully deductible even in the correct percentage category.
- Claiming 80G under the new tax regime — the deduction simply is not available there, and claiming it will likely be adjusted out during processing.
- Donating goods or services and expecting a deduction — only monetary contributions through eligible modes qualify.
Frequently Asked Questions
Can I claim 80G deduction for donations made in cash?
Only up to ₹2,000. Any cash donation exceeding this threshold is disallowed for the amount above the cap, so larger donations must be made through banking channels like cheque, UPI, or net banking to remain eligible.
Is Section 80G available under the new tax regime?
No, generally not. Section 80G falls under Chapter VI-A deductions that are excluded under the new regime for FY 2025-26. Taxpayers who want to claim it must file under the old regime — verify current-year rules before filing.
How do I know if an NGO is eligible to issue 80G receipts?
Check the institution's 80G registration number and its validity period, which should be mentioned on the donation receipt. You can also verify current registration status through the tax department's official records before donating.
What is Form 10BE and why does it matter?
Form 10BE is the certificate that a registered institution must issue to donors after filing its statement of donations with the tax department. It generates an Acknowledgement Reference Number that gets reported in your AIS, and is increasingly essential for a smooth 80G claim.
Are donations to political parties eligible under Section 80G?
No. Donations to political parties are covered under a separate section (80GGC/80GGB, depending on donor type), not Section 80G, and carry their own distinct conditions.
Can a company claim 80G deduction on CSR spending?
Generally, donations made to fulfil mandatory CSR obligations are not eligible for 80G deduction, since the expenditure is treated differently under the Companies Act framework. Voluntary donations beyond CSR requirements may still qualify, subject to the usual conditions.
What happens if the donee's registration expires after I donate but before I file my return?
Eligibility is generally determined by the registration status on the date of donation, not the date of filing. However, documentation practices and reporting by the institution can still affect whether your claim reflects correctly in AIS, so it is wise to secure the Form 10BE promptly.
Is there a maximum amount I can donate and claim under 80G?
There is no absolute upper limit on the donation amount itself, but the deductible portion is governed by the category (100%/50%) and, where applicable, the qualifying limit tied to a percentage of your adjusted gross total income — verify the current qualifying limit percentage before planning large donations.
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