How To Declare Donations In ITR: Your Essential Guide To Claim Section 80G Deductions

The taxpayers are gearing up to file the Income Tax Return (ITR) for the financial year 2024-25 to fulfil their tax obligations. The Income Tax Department is expected to notify the forms for Assessment Year 2025-26 soon. It is the time for the taxpayers to gather all documents and proofs to claim deductions ahead of ITR filing.  

The taxpayers, who don’t need their accounts to be audited, can file the ITR by July 31, 2025. However, it’s advisable to collect all your documents and file the ITR well in advance to avoid last minute rush. If you are looking forward to claim deductions and exemptions under various sections of the Income Tax Act, 1961, it’s important to declare the details properly in your ITR filing.

Section 80G under the I-T Act, 1961, permits taxpayers to claim deductions for contributions made to specific charitable organisations. However, Section 80G does not allow for the deduction of all donations made to charitable organisation. Under the I-T Act, donations to designated relief funds and charitable organisations registered with the Income Tax Department are eligible for the tax benefits.

The government implemented the Section 80G deduction in order to encourage people and organisations to make charitable contributions while also offering them tax advantage.

The amount donated can be deducted from the taxpayer’s total income tax amount under Section 80G and Section 80 GGA. Anyone can claim these deductions, including individuals as well as companies, regardless of the income earned.

Section 80G outlines eligible donations to government trusts, relief funds set up by the government, private trusts and the approved organisations engaged in research activities. On the other hand, Section 80GGA allows deductions against donations to a college, university, or an organisation engaged in scientific research, or in the field of rural development.

The deduction can range from up to 50% or 100% of the total amount donated depending on the fund or organisation to which the money was donated.

However, not all donations made under section 80G are eligible for a deduction. Deductions are only available for contributions made to specified funds, organisations, Trusts, or NGOs.

Therefore, it's vital to confirm if the organisation or fund to which the donation was made is eligible for the Section 80G deduction.

The taxpayer needs to get a receipt or an 80G deduction limit certificate from the organisation or fund to which the donation was made in order to claim the deduction under Section 80G.

Along with the donor's name, the amount donated, and the fund or institution's Section 80G registration number, the receipt should also contain the fund or institution's name, address, and PAN number.

The taxpayer must submit Form 58A in order to claim a 100% deduction for their donation; otherwise, the donation will not qualify for the 100% deduction. Form 58A will only be available for specific categories of eligible deductions.

However, if you have any revenue or losses from a business or profession, you will not be able to claim the deduction.

Such donations should be made in cash, cheques, or electronic transfers rather than in the form of products or services to be eligible for a deduction under Section 80G.

Moreover, cash donations beyond Rs 2,000 do not qualify for the Section 80G deductions. Donors need to make sure they have a receipt for their contributions, which includes all the aforementioned information.

Before donating an amount, donors should verify their eligibility and the maximum 80G deduction limit for each fund or organisation. The deduction cap and eligibility restrictions may vary depending on the fund or organisation to which the donation was made.

It’s important to note that the taxpayers can claim deductions based on the income tax regime they choose. While the old tax regime allows several deductions under multiple sections of the I-T Act, 1961, the new tax regime restricts such deductions. The taxpayers can only claim the Section 80G and Section 80GGA deductions against donations to charitable organisations under the old tax regime. These deductions can’t be claimed under the new tax regime.