Sec 80G donations — the 50% vs 100% bucket map
Most filers think Sec 80G gives 50% deduction on donations. It actually allows four different combinations — 100% without limit, 100% with limit, 50% without limit, 50% with limit — depending on which institution receives the donation. Get the bucket wrong and your claim gets disallowed at scrutiny. Here's the map.
The four buckets
| Bucket | Deduction rate | Qualifying-amount cap | Examples |
|---|---|---|---|
| 1 | 100% | No cap | PM CARES Fund, PM National Relief Fund, Swachh Bharat Kosh, Clean Ganga Fund, National Defence Fund |
| 2 | 50% | No cap | Jawaharlal Nehru Memorial Fund, Indira Gandhi Memorial Trust, Rajiv Gandhi Foundation |
| 3 | 100% | Capped at qualifying amount | State Government funds for family planning, Indian Olympic Association |
| 4 | 50% | Capped at qualifying amount | Most registered NGOs holding 80G(5)(vi) certificate — schools, hospitals, religious trusts |
"Qualifying amount" for buckets 3 and 4 = 10% of gross total income (before chapter VI-A). So if your GTI is ₹15 L and you donated ₹3 L to a 50%-bucket NGO, only 10% × 15 L = ₹1.5 L is the qualifying amount; 50% of that = ₹75,000 is the deduction. The rest of the donation has no tax shield.
Most everyday donations are bucket 4
The big-name government funds (PM CARES, NDF) are bucket 1 — 100% no-cap. But most actual donations made by retail filers — to charity hospitals, orphanages, religious trusts, college trusts, ISKCON, Akshaya Patra etc. — are bucket 4. So:
- 50% rate, not 100%
- Capped at 10% of GTI
- Effective tax saving at 30% slab: 30% × 50% × min(donation, 10% of GTI) = ~15% × actual donation
For a salaried filer earning ₹15 L with a ₹50K donation: tax saving = ₹50K × 50% × 30% = ₹7,500. Worth claiming, but not the 100% mental model.
Mandatory documentation since FA 2020
Since AY 2021-22, every 80G donation must be supported by:
- 80G receipt from the donee, mentioning: donor name, donee name, donee PAN, 80G registration number, amount, mode (cheque / NEFT / cash), date
- Form 10BE, an annual donation certificate that the donee files with the IT Dept (similar to Form 16 for salary). The donee must furnish it by 31-May of the AY
If Form 10BE isn't furnished by the donee, your 80G claim is automatically disallowed at processing — the AIS won't show the donation. So always ask the donee at year-end: "Have you filed Form 10BE listing my donation?"
Cash limit dropped to ₹2,000
FA 2017 reduced the cash-donation cap from ₹10,000 to ₹2,000. Donate ₹3,000 in cash to an NGO → only ₹2,000 is eligible for 80G; the rest is non-deductible. Above ₹2,000, donations must be through cheque / UPI / NEFT / RTGS / IMPS / card.
Practical: most NGOs now have payment-gateway links specifically for tax-receipt issuance. Use them; you get an instant 80G-compliant receipt.
The new-regime vs old-regime impact
Sec 80G is an old-regime-only deduction. Under Sec 115BAC new regime, 80G isn't allowed except for very narrow categories (e.g., 80G specifically for government funds). So with FA 2025 extending Sec 87A rebate to ₹12 L — making new regime the default for most — 80G's relevance shrinks.
The exception: high-income filers in 30%+ bracket who genuinely give to charity may still find old regime + Sec 80G + Sec 80D + Sec 24(b) outpaces new regime even after rebate. Compute both regimes via our calculator.
📌 Family / personal donations don't qualify: Gift to a poor relative, donation to a private trust your family runs, charity directly handed to beggars — none of these are Sec 80G-eligible. The recipient must be a government fund OR a registered Sec 80G(5)(vi) certificate-holder.
Verifying a charity's 80G eligibility
Before donating to a small / lesser-known NGO, verify their 80G status:
- Ask for their 80G registration certificate (issued by Pr. CIT)
- Check expiry — 80G certificates are now valid for 5 years (post FA 2020), renewable
- Verify on incometax.gov.in → e-File → Tax Exemption → Search
- Confirm their PAN matches the certificate
If you donated to an unregistered or expired-certificate trust, no 80G deduction. We've seen this at scrutiny — the AO checks every donee PAN.
The Finclar take
For most filers, Sec 80G is a small additive — 2-5% of total deductions. The exceptions are HNI filers who give meaningfully to charity each year. For them, the 100%-no-cap bucket 1 (PM CARES etc.) is materially better than the 50%-capped bucket 4. If you're channelling ₹2 L+ per year to charity, route at least the headline amount to a bucket-1 institution to maximise the deduction. Keep every 80G receipt + verify Form 10BE annually — claim disallowance is silent and automatic.