Contributions made to certain relief funds and charitable institutions can be claimed as a deduction under Section 80G of the Income Tax Act.
All donations are not eligible for deduction under section 80G. Only donations made to prescribed funds qualify as a deduction.
Deduction allowed to all types of tax payers – This deduction can be claimed by any tax payer -individuals, company, firm or any other person.
Mode of payment – This deduction can only be claimed when the contribution has been made via cheque or draft or in cash. But deduction is not allowed for donations made in cash exceeding Rs 10,000. In-kind contributions such as food material, clothes, medicines etc do not qualify for deduction under section 80G.
From Financial Year 2017-18 onwards – Any donations made in cash exceeding Rs 2000 will not be allowed as deduction. Thus the donations above Rs 2000 should be made in any mode other than cash to qualify as deduction u/s 80G.
Amount of donation – The various donations specified in section 80G are eligible for deduction up to either 100% or 50% with or without restriction as provided in section 80G.
How to claim the deduction – To be able to claim this deduction the following details have to be submitted in your Income Tax Return