Section 80G: How Donations Reduce Your Tax Bill

Section 80G lets you deduct donations made to eligible trusts, charities, and funds from your taxable income, reducing your tax bill. It sits alongside 80C and 80D as one of the more well-known Chapter VI-A deductions — but it has its own distinct set of rules, and getting them wrong is one of the most common reasons a donation deduction gets rejected or reduced during processing.

Before going further, it is worth being upfront about something important: like every deduction covered on this site under Chapter VI-A, Section 80G is available only under the old tax regime. If you file under the new regime, your donations — however generous — do not reduce your taxable income at all. This makes 80G relevant mainly to taxpayers who have already decided, or are planning, to file under the old regime for other reasons (large 80C/80D claims, HRA, home loan interest, and so on). If you haven't checked which regime suits you, the Income Tax Calculator will tell you, comparing both regimes and giving a plain-language recommendation.

Most everyday 80G donations — to a registered charitable trust or NGO, for instance — fall into the 50%-deductible category. Within this category, there is also a "qualifying limit": you can only count donations up to 10% of your adjusted gross total income toward this category for the purpose of the deduction. If you donate more than that 10% threshold in this category, the excess above the qualifying limit does not get additional deduction benefit that year.

Separately, a smaller set of specific funds — certain funds that operate at the national level, such as the Prime Minister's National Relief Fund and the National Defence Fund — qualify for 100% deduction with no qualifying limit at all. This site does not maintain an exhaustive list of every fund in this 100%-no-limit category, since eligibility can change and is best confirmed directly with the fund or the Income Tax Department at the time of donating; the point to take away is simply that this second, more generous category exists alongside the more common 50%-with-limit category.

The mechanics of the qualifying limit are easiest to understand with an illustrative example — the figures below are made-up, purely to show how the calculation works, not fixed limits that apply to everyone.

Suppose a taxpayer has an adjusted gross total income of Rs 20,00,000 for the year. Their qualifying limit for 50%-category donations is 10% of that, which is Rs 2,00,000. Now suppose they donated Rs 3,00,000 during the year to an eligible trust that falls in the 50%-deductible category. Since Rs 3,00,000 exceeds the Rs 2,00,000 qualifying limit, only Rs 2,00,000 of the donation counts toward the calculation — the remaining Rs 1,00,000 does not get additional benefit this year. The deduction itself is then 50% of the amount that qualifies: 50% of Rs 2,00,000, which works out to Rs 1,00,000 as the final deduction claimed under Section 80G for that donation.

This is different from a 100%-no-limit category donation, where the full donated amount (to that specific eligible fund) would be deductible without this 10%-of-income ceiling applying at all.

This is arguably the single most important practical rule under Section 80G: any donation made in cash for an amount exceeding Rs 2,000 is not eligible for deduction at all. To claim a deduction for any amount above Rs 2,000, the payment must be made through a non-cash mode — cheque, demand draft, net banking, UPI, card, or similar traceable methods. Donations of Rs 2,000 or less can be made in cash and still qualify.

This trips up a lot of well-meaning donors, particularly around large religious or community donations, where cash is still the customary mode of giving. The fix is simple but easy to forget in the moment: for any donation you intend to claim above Rs 2,000, insist on a digital payment method rather than cash, regardless of how the organisation usually accepts donations.

A donation only qualifies for deduction if it is made to a trust or fund that holds valid 80G registration at the time of the donation. It is worth verifying this before donating rather than after — ask the organisation for their 80G registration number or certificate, and don't assume a trust is eligible just because it is well-known or does credible charitable work; formal registration is what the law requires.

You will also need a proper donation receipt to claim the deduction — this should typically show the donor's name, the amount donated, the date, and the organisation's PAN and 80G registration details. Keep this receipt with your other tax documents; without it, a claimed deduction can be disallowed even if the donation itself was genuine and the organisation was properly registered.

Before claiming any donation under Section 80G, run through these checks: confirm you are filing under the old tax regime, since this deduction has no effect under the new regime; confirm the recipient trust or fund holds valid 80G registration; confirm the payment was made through a non-cash mode if the amount exceeds Rs 2,000; keep the donation receipt safely; and if your total 50%-category donations for the year are large relative to your income, remember that only up to 10% of your adjusted gross total income counts toward the qualifying limit in that category.

If you are also claiming 80C and 80D deductions in the same year, it is worth looking at your overall old-regime deduction picture together — the Deduction Gap Planner shows how your 80C, 80D, and other Chapter VI-A claims add up, so you can see your complete deduction position rather than each section in isolation.