Not All Donations Are Fully Deductible

• Donations under Section 80G are not always 100% deductible.
  
• Deductibility depends on the type of institution, purpose of donation, and mode of payment.
  
• Donations are categorized based on percentage of deduction and whether they are subject to a qualifying limit.
  
• Only specific donations qualify for 100% deduction without any restriction.
  
• Most others are either 50% deductible or subject to income-based limits.
  

Categories of Donation Deduction

• 100% deduction without limit: Donations to the National Defence Fund, PM’s National Relief Fund, or PM CARES Fund.
  
• 50% deduction without limit: Donations to the Prime Minister’s Drought Relief Fund, Indira Gandhi Memorial Trust.
  
• 100% deduction with 10% limit: Donations to government or local authority for promoting family planning.
  
• 50% deduction with 10% limit: Donations to charitable trusts, NGOs, and certain educational institutions.
  
• The 10% limit refers to 10% of the adjusted gross total income.
  

Mode of Payment Restrictions

• Cash donations exceeding ₹2,000 are not eligible for any deduction.
  
• Donations must be made through cheque, bank transfer, or digital mode to qualify.
  
• Donations in kind (clothes, food, services) are not eligible for deduction.
  
• Receipts and Form 10BE issued by the donee are required to claim the deduction.
  
• PAN of the trust or institution must be mentioned in the return.
  

Claiming the Deduction

• Only taxpayers opting for the old tax regime can claim the deduction.
  
• Deduction is claimed under Section 80G while filing the income tax return.
  
• It reduces the taxable income and helps in overall tax savings.
  
• Must ensure the institution is approved and registered under Section 80G.
  
• Overstated or ineligible claims may lead to penalties during scrutiny.