A donation to a charitable trust under Section 80G of the Income Tax Act, 1961, can reduce your taxable income by 50% or 100% of what you gave, sometimes capped at 10% of your adjusted gross total income. The deduction only works if four things line up: you file under the old tax regime, the recipient holds current 80G registration, you pay through a traceable non-cash channel for anything above ₹2,000, and you collect the right certificate from the trust. Miss any one of those, and the entire tax benefit disappears.
You Must File Under the Old Tax Regime
Since Assessment Year 2024–25, the new tax regime under Section 115BAC is the default for individuals and Hindu Undivided Families. The new regime offers lower slab rates but removes most deductions, and Section 80G is one of them. If you do not actively opt for the old regime when you file, your charitable donation produces zero tax saving no matter how large it was or how well-credentialed the trust.
Salaried taxpayers and others without business income can simply choose the old regime each year at the time of filing. Filers with business or professional income face a stricter rule: the switch is essentially one-way and binds future years. Before making a large donation for the tax benefit alone, work out whether the old regime actually leaves you better off overall.
Check the Trust’s Registration Before You Donate
A qualifying trust needs two separate registrations under the Income Tax Act. Section 12AB registration exempts the trust itself from tax on its surplus. Section 80G registration is what lets you, the donor, claim the deduction. Both must be current on the date you make the donation.
Since recent reforms, registrations under Section 12AB must be renewed every five years, and the trust has to apply for renewal at least six months before expiry. If the registration lapses, every donor who gave during the lapsed window loses the deduction. You can verify a trust’s status on the Income Tax Department’s e-filing portal, and it takes about two minutes.
Certain government funds have statutory recognition under Section 80G itself and need no separate verification. The list includes the National Defence Fund, the Prime Minister’s National Relief Fund (PM CARES Fund), the Swachh Bharat Kosh, the Clean Ganga Fund, the National Children’s Fund, Chief Minister’s Relief Funds, and roughly two dozen other named bodies.
How Much You Can Deduct
Section 80G sorts eligible recipients into four categories based on two variables: whether 100% or 50% of the donation is deductible, and whether the total is capped at 10% of adjusted gross total income.
- 100% deduction with no qualifying limit: donations to about two dozen specified government funds, including the National Defence Fund, PM CARES Fund, Swachh Bharat Kosh, and the National Sports Development Fund.1Income Tax Department. FAQs on Section 80G
- 50% deduction with no qualifying limit: donations to the Prime Minister’s Drought Relief Fund.1Income Tax Department. FAQs on Section 80G
- 100% deduction subject to the 10% qualifying limit: donations to government-approved institutions promoting family planning, and corporate donations for sports infrastructure.1Income Tax Department. FAQs on Section 80G
- 50% deduction subject to the 10% qualifying limit: most private charitable trusts, donations to government or local authorities for general charitable purposes, housing development authorities, and donations for renovating notified places of worship.1Income Tax Department. FAQs on Section 80G
Most donations to a local registered charitable trust fall into that fourth tier. Give ₹20,000, deduct ₹10,000, subject to the qualifying limit.
Donations totalling less than ₹250 in a financial year do not qualify at all.2Income Tax Department. Income Tax Act Section 80G
How the 10% Qualifying Limit Works
For the two capped categories, only donations up to 10% of your adjusted gross total income are eligible to be considered for the deduction. Adjusted gross total income means your gross total income after subtracting other Chapter VI-A deductions (Sections 80C through 80U, excluding 80G itself), exempt income, long-term capital gains, and short-term capital gains taxed under Section 111A.1Income Tax Department. FAQs on Section 80G
Say your adjusted gross total income is ₹10,00,000. Ten percent is ₹1,00,000. If you donate ₹1,50,000 to a private charitable trust in the 50%-with-limit category, only ₹1,00,000 of the donation is considered. Your actual deduction is 50% of that, so ₹50,000. The extra ₹50,000 you gave produces no tax benefit. Indian tax law does not allow excess charitable contributions to be carried forward to a later year.
Payment Rules
Cash donations above ₹2,000 are entirely ineligible for a Section 80G deduction. Hand over ₹5,000 in cash and you get nothing at tax time, receipt or no receipt.1Income Tax Department. FAQs on Section 80G
For anything above ₹2,000, use a traceable channel: cheque, demand draft, or an electronic transfer such as UPI, NEFT, or RTGS. Keep the bank statement or transaction confirmation as backup.
Donations in kind do not qualify. Clothes, food, medicines, equipment — none of it reduces your tax, regardless of value. Only money paid through approved channels generates a deduction.1Income Tax Department. FAQs on Section 80G
The Paperwork You Need
Collect a receipt at the time of donation. It should show the trust’s legal name and registered address, its PAN, its 80G registration number, the validity period of that registration, and your PAN.
The document that actually secures the deduction arrives later. Every 80G-registered trust must file a Statement of Donations (Form 10BD) with the Income Tax Department and then issue Form 10BE, the Certificate of Donation, to each donor by May 31 of the financial year following the one in which you donated.3Income Tax Department. Form 10BE
Form 10BE ties your donation to the tax system through a unique identification number generated from the trust’s Form 10BD filing. Without it, the pre-filled data in your return may be incomplete and your claim becomes much harder to defend in a scrutiny assessment.3Income Tax Department. Form 10BE
Claiming the Deduction in Your Return
When you file under the old regime, go to Schedule 80G within the ITR form. Both ITR-1 (Sahaj) and ITR-2 include it.4Income Tax Department. File ITR-2 Online User Manual
The schedule asks you to classify each donation into its correct category (100% or 50%, with or without qualifying limit) and enter the trust’s PAN, its 80G registration number, the donation amount, and the eligible deduction. If the trust has already filed Form 10BD, the portal may pre-populate some fields. Cross-check them against your Form 10BE before submitting. Errors in the trust’s reporting become your problem.
You do not upload the receipt or the certificate with the return. Keep them, along with your bank transaction records, for at least six years after the relevant assessment year. The assessing officer can ask for them during a scrutiny or inquiry at any point in that window.
Penalties for a Wrong or Inflated Claim
Claiming a deduction for a donation you did not make, inflating the amount, or donating to a trust whose 80G registration has lapsed can lead to serious consequences. Section 270A imposes a penalty of 50% of the tax payable on under-reported income. If the department treats the claim as deliberate misrepresentation rather than an honest mistake, that penalty rises to 200%.5Income Tax Department. Income Tax Act Section 270A
In cases the department considers wilful evasion, Section 276C authorises criminal prosecution, with the possible term of imprisonment depending on the amount of tax involved.6Income Tax Department. Income Tax Act Section 276C
Prosecution of individual donors is rare, but penalty assessments under Section 270A are not. The common trigger is a donation to a trust whose 80G registration had already expired on the date of the gift. Donors usually have no idea. Checking the trust’s status on the e-filing portal before you pay is the cheapest insurance you can buy against that outcome.