Tax Exemption on Donations – Section 80G Made Simple
Donating to a cause close to your heart not only helps someone in need—it can also help you save on taxes. Under Section 80G of the Income Tax Act, donations made to registered charitable organisations in India can be deducted from your taxable income, giving you a financial incentive for giving back.
Why the Government Offers Tax Benefits on Donations
NGOs and nonprofit organisations across India play a critical role in supporting communities—from education and healthcare to feeding the poor and empowering women. They often work in areas where the government can’t reach easily.
To encourage people to support this work, the Indian government offers tax benefits on donations, making it easier for individuals and companies to contribute to social welfare.
What is Tax Exemption?
In simple terms, tax exemption means you don’t have to pay tax on a certain portion of your income. When you donate to a registered NGO that qualifies under Section 80G, the amount you give can be deducted from your total income before calculating your taxes.
How Section 80G Works
Donations to an eligible NGO can be deducted from your taxable income.
You’ll need a receipt and 80G certificate from the organisation to claim the exemption.
Only NGOs registered and approved under Section 12A and 80G qualify.
Donations to religious institutions are not eligible under Section 80G.
You cannot claim tax benefits for donations made in kind (clothes, food, etc.).
Donations over ₹2,000 must be made through cheque, bank transfer, or digital payment—cash donations above ₹2,000 are not eligible for deduction.
Who Can Claim 80G Tax Deductions?
Anyone with taxable income in India can claim a deduction under Section 80G, including:
Individuals
Companies
Firms
Hindu Undivided Families (HUFs)
NRIs (with an Indian passport and taxable income in India)
Documents You’ll Need to Claim 80G Deductions
To successfully claim your tax exemption, make sure you have:
Donation Receipt – Must include the NGO’s name, PAN number, address, your name, donation amount, and stamp/signature.
80G Certificate – Provided by the NGO, confirming they are registered under Section 80G.
Form 58 – Required only if you’re claiming 100% tax deduction.
Registration Number – The NGO’s registration number should appear on the receipt and must be valid on the date of donation.