Section 80G

Why Section 80G Matters

The key benefit of Section 80G is tax savings. For instance, if you donate ₹1.6 lakh to an NGO with a 50% deduction rate, you lower your taxable income by ₹80,000. This can lead to tax savings of ₹16,000 to ₹24,000, based on your income slab.

This section also promotes philanthropy. It supports vital causes like disaster relief and rural development. Plus, it allows you to donate to many types of institutions, from religious trusts to research organisations.

Challenges with Section 80G

There are limits. Cash donations are capped at ₹2,000, so larger contributions must go through digital or banking channels.

You can’t claim 80G deductions under the new tax regime, so it only benefits those who have chosen to stick with the old regime.

Additionally, deductions are capped at 10% of your adjusted gross total income (AGTI). So, if your AGTI is ₹10 lakh, the maximum donation eligible for deduction is ₹1 lakh, even if you give more.

Some funds that previously qualified, like PM CARES, are no longer eligible for deductions after FY 2023–24, so it’s important to double-check before donating.

How to Manage Section 80G Donations Effectively

First, confirm that the organisation you’re donating to has a valid 80G certificate with an active registration number.

Always use digital payments for donations above ₹2,000 and keep proper documentation, including receipts, Form 10BE, and the organisation’s PAN details.

Plan your donations so they stay within 10% of your AGTI. For example, if your AGTI is ₹10 lakh, donations above ₹1 lakh won’t give you extra tax benefits.

Pair your 80G deductions with Section 80C investments like PPF or ELSS to maximise overall tax savings.

Final Thoughts

Section 80G is a valuable tool to lower taxes while contributing to causes that matter. Just remember to check eligibility, stay within limits, and keep clear records. With the right planning, charitable giving can be both impactful and tax-efficient.