Deductibility Under Section 80G

• Yes, donations are deductible under section 80G of the Income-tax Act, 1961.
  
• The deduction is allowed for donations made to approved funds, trusts, and charitable institutions.
  
• Only donations made by cheque, demand draft, or digital payment are eligible.
  
• Cash donations above ₹2,000 are not eligible for deduction.
  
• The recipient organization must be registered and approved under the Act.
  

Eligible Donors and Contributions

• Domestic and foreign companies are eligible to claim deductions under section 80G.
  
• Donations to Prime Minister’s Relief Fund and other notified funds qualify.
  
• Contributions to political parties and electoral trusts are covered under section 80GGC.
  
• Donations in kind are not eligible for tax benefits.
  
• Documentation such as a donation receipt is mandatory for claiming the deduction.
  

Extent of Deduction Allowed

• Donations are classified as eligible for 100 percent or 50 percent deduction.
  
• Some donations are subject to qualifying limits, others are not.
  
• The qualifying limit is 10 percent of adjusted gross total income.
  
• Deductions exceeding the limit are disallowed.
  
• The final allowable amount depends on fund category and income calculation.
  

Corporate Tax Regime Restrictions

• Companies opting for the concessional tax regime under section 115BAA or 115BAB cannot claim deductions under section 80G.
  
• This includes most chapter VI-A deductions except section 80JJAA.
  
• The lower tax rate regime requires companies to forego donation-related deductions.
  
• Companies must carefully evaluate the trade-off between lower rates and deduction benefits.
  
• Companies under the regular regime continue to enjoy donation deductions.
  

Compliance and Reporting Requirements

• Donation receipts must include PAN, registration number, and name of the donee organization.
  
• The donee must be registered on the Income Tax portal under section 80G(5).
  
• Companies must retain proof of payment and donation details.
  
• The deduction must be correctly claimed in the income tax return.
  

Audit reports may verify the authenticity of claimed donations.