Tax Exemption | What is Tax Exemption Under Section 80G
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A voluntary help, either in terms of money or kind, towards needy people, is known as charity. It not only makes you feel happy from within, but when you donate you can also save some tax.

Today, there are various Non-Governmental Organisations (NGOs) and other non-profit bodies that collectively work towards conducting charitable activities that help them raise funds or non-monetary charity for people in need. Such institutions have put forth their best efforts that further play a significant role in promoting the various economic development and social welfare objectives that the Indian Government has initiated. The outreach and localised approach that NGOs and other non-profit entities follow has allowed for the identification of the needy and helps in ensuring that a supporting hand is provided to them. This is one of the key reasons why the Government of India offers tax incentives and exemptions to NGOs and charitable organisations with the exemptions under Section 80G of the Income Tax Act being the most significant ones.

What is Tax Exemption?

The reduction or removal of a liability to make a mandatory payment that is otherwise imposed by the ruling power on a property, individual, income, and so on, is known as tax exemption. Having a tax-exempt status may also provide relief from other taxes, offer reduced rates, or tax only on a portion of certain items. Exemption of tax for donations to charitable trusts and NGOs, from property and income taxes for veterans, cross-border scenarios, and so on, are some of the examples of tax exemption. An important thing that organisations need to keep in mind is that the registrations are granted under Section 12A of the Income Tax Act. However, that doesn’t give direct approval for deductions under Section 80G. This is because Section 80G tax benefits on donations apply only to charitable trusts, NGOs, and similar institutions. It doesn’t apply to religious trusts or institutions.

Section 80G of the Income Tax Act of 1961 is a little different, as it provides tax exemption to charity donors as well. Donations to an NGO under 80G offers deductions while calculating the total income of the donor. The recipient of the charity donation gives a receipt of donation to the donor based on which they get the entitled deduction, provided the NGO or charitable trust is approved under Section 80G. In addition to this, tax exemptions on charity are also applicable, provided the charity organisation is established in India and is operating for charitable purposes in the country.


1.How can I save tax by donating to NGO?

Donation not only makes you happy but also lets you donate and save tax. Section 80G of the Income Tax Act’1961 provides tax exemption to both the charitable trust and the charity donor, provided the NGO meets all the stated rules of the act. You need to present the receipt of donation based on which you can avail the deduction.

2.What is the maximum amount of income tax exemption under 80g

Depending on the category of donation, the maximum limit for deduction is set. While in some cases, there is no maximum limit set for the deduction; in some, the income tax exemption under 80G is set at a limit of 10% of the adjusted gross total income of the charity donor.

3.What is tax exemption under 80g?

Tax exemption under 80G is applicable to only to NGOs, charitable trusts, and similar institutions. The deductions are not applicable to religious trusts and other such establishments. The tax exemption under 80G is unique as it provides tax deductions to the ones making the donation as well.

4.What is the tax exemption for donations?

Tax exemption is the removal or reduction of a liability from making a mandatory payment that is imposed by the ruling power on a property, income, and so on. Tax exemptions on charity can availed when you make a donation to a charitable trust or NGO, provided the stated rules are met.

5.How much of a donation is tax deductible?

For tax exemption donations under Section 80G, amount in cash within the limit of Rs. 2000/- is eligible. However, for amount exceeding Rs. 2000/-, payments in any mode other than cash are eligible for tax deductions. Contributions like food, medicines, and so on are not eligible for tax exemption donations under 80G.

6.Which donation is eligible for 100% deduction?

For 100% tax deductible donations, there are categories and sub-categories like deductions without any limit, deductions with limits, and so on, under which you have to donate. An important thing that you need to keep in mind is that if your donation falls under 100% deduction, having Form 58 is a must.

7.What are the benefits of NGO donation?

Availing tax benefits on donation is one of the best advantages of donating money to an NGO. You can easily claim tax deductions provided the NGO is eligible under Section 80G of the Income Tax Act’1961. Other than tax benefits on donation, helping the needy also makes you feel happy and content.

8.How is 80g donation calculated?

You can make donations to NGO under 80G to claim tax incentives. There are various donations that are specified under Section 80G. They can be eligible for tax deduction of up to 100% or 50% with or without restrictions, provided they meet all the rules stated under Section 80G.

9.What is the limit for donation under 80g?

If you wish to donate the amount in cash, the limit for donation under 80G is Rs. 2000/-. If the donation amount exceeds Rs. 2000/-, you have to donate in any mode other than cash to qualify for the donation deduction under 80G.

10.Do Charitable Trusts pay tax?

Non-Governmental Organisations (NGOs) and charitable trusts in India are subjected to tax exemptions under Section 80G of the Income Tax Act of 1961. However, for the tax exemption, the charitable trust must be established in India and should operating for charitable purposes in the country.

11.Are there tax exemptions on cash donations as well?

Cash donations above Rs.2, 000 are not applicable for 80G certificates.

12.Do you issue instant tax receipts?

Soft Copy Receipt of the donation is made available instantly. But, Hard Copy of your tax receipts can be provided within 10 days.

13.What is the minimum amount that needs to be donated to get a tax exemption?

A minimum of Rs 500 needs to be donated to avail tax exemption under IT sec 80 G for Online Donations.

14.When can I get a tax exemption certificate?

We generate the tax certificate within 8 days from the date of the contribution made through online donations. Including the courier process, it takes 10 days for the exemption certificate to reach you. If you contribute offline it takes 15 to 20 days.

15.What Tax exemption benefit do I get?

Making donations under section 80G can help you with tax deduction benefits. The exemption is calculated by reducing the donated amount from your taxable salary. For instance, if your taxable income per year is Rs 200,000 and you make a donation of Rs 5,000 then your net taxable income will become Rs 197,500. Your tax will now be calculated on this new amount basis the prevailing tax rates. As per the revised tax exemption act, effective April 1, 2017, donations to Narayan Seva Sansthan will be eligible for a 50% tax exemption under Section 80G of Income Tax Act.

16.What are 80G donations?

80G is a certificate that exempts you from paying taxes if you have made donations to NGOs, charitable trusts that are registered to offer you exemptions from taxes. Donations to Narayan Seva Sansthan are exempt from 50% tax under section 80G of the Income Tax Act. The tax benefit is valid only in India.

17.Income Tax Exemption in India: How does it work?

Tax exemption is the financial exclusion that lowers the taxable income. Tax exemption is therefore a mandatory exemption to a general rule. Tax exemptions are given to boost certain economic activities such as the activities of the Charity Organization

Tax Exemption on Donations Under Section 80G

A voluntary help, either in terms of money or kind, that is put towards helping those in need, is known as charity. A way for people to give back to society, making a donation to an NGO doesn’t only make you feel happy, but you can also donate and save tax.

Today, there are several Non-Governmental Organisations (NGOs) and other non-profit organisations that are collectively working towards the betterment of society through several initiatives and charitable activities to raise funds or non-monetary support to help those in need. These institutions have been consistently putting in their best efforts and playing a significant role in promoting economic development as well as the social welfare objectives that have been initiated by the Indian Government. The localised approach as well as outreach programmes by the NGOs in India are very important and go a long way in extending a helping hand to the specially-abled and underprivileged from the weaker sections of society, helping them forge better lives for themselves, thereby also supporting the betterment of society as a whole. This is one of the key reasons why the Government of India also offers several exemptions and tax benefits on donations made to charitable organisations, with the deductions under Section 80G of the Income Tax Act being the most significant.

What is Tax Exemption in India?

The reduction or removal of the liability to make the mandatory payment that is otherwise imposed on property, individuals, income, and so on, is known as a tax exemption. Tax exemption in India can have several meanings, including the provision of relief from other taxes, reduced rates, or the liability to pay tax on only a portion of certain items. Some examples of tax exemption include charity donations, income tax exemption for veterans, cross-border scenarios, etc.

Tax Exemption in India for Charitable Donations

Donate and save tax when you contribute towards the causes and initiatives supported by Narayan Seva Sansthan. Under Section 80G of the Income Tax Act of India, certain contributions or donations to charity are eligible for tax deduction. These contributions are considered for income tax exemption under 80G only if the organisation is registered and validated with the Income Tax Department and can provide the necessary receipts and 80G certificate to the donor.

An important thing that you should keep in mind here is that the tax exemption under the Income Tax Act for charitable organisations, NGOs, and other non-profit organisations is governed by Section 12A. This however does not entail approval for deductions for donors, the deductions for whom are listed under Section 80G. Deductions under Section 80G do not apply to religious trusts or institutions.

Understanding Section 80G in the Income Tax Act

Though the government allows claiming of deductions on donations to charity organisations and relief funds, all donations are not eligible for tax exemptions. People who are eligible to pay tax are automatically eligible to claim a donation as exemption under section 80G. Here, the taxpayer can be an individual, firm, company, Hindi Undivided Family, company, or anyone else. However, you should be an Indian or a Non-Resident Indian (NRI) holding an Indian passport, and you should have a taxable income in India if you want to claim a donation under the list of 80G exemptions.

Further, for claiming an exemption under the Income Tax Act, you must satisfy the following criteria as well:

  • The donation should have been made to an approved, registered, and validated NGO or non-profit.
  • The 80G receipt for the donation should be available.
  • You will also be required to download the 80G certificate for the organisation to which you made the donation.
  • The cash donation limit as per the Income Tax Act is Rs 2000. So, if you wish to claim a donation that exceeds Rs 2000 as deductions under 80G, it should be made through some other accepted payment mode.

You also cannot claim tax benefits on donations that are made in kind.

Eligibility for Claiming Deductions Under Section 80G

All taxpayers in India, or those having a taxable income in India, are eligible to claim donations made to charity organisations as deductions under Section 80G on the Income Tax Act of India, subject to the limits set down by the government of India. This includes individuals, Hindu Undivided Families, and companies. NRIs, who hold an Indian passport are also entitled to the benefits under Section 80G, provided their donations are made to eligible institutions or funds.

Only donations made to valid, registered charities qualify for suitable deduction. This means that the trust or charity to which you are making the donation should be registered under Section 12A, after which they are considered to be qualified for the 80G certificate. Individuals must always check the credentials of a charity organisation before they make a donation to it.

Documentation for Claiming a Section 80G Deduction

If you wish to claim a Section 80G deduction, you will be required to submit the following documents to support the claim:

Receipts: It is mandatory for you to have a duly stamped receipt that has been issued by the charity organisation that has received your donation. The receipt should clearly mention important details like the name, address, and PAN of the trust, the amount that has donated, as well as the name of the donor.

Form 58: This is an essential document for the donations that are eligible for a 100% deduction.

The Registration Number of the Trust: Every eligible trust is provided with a registration number by the Income Tax Department, and it is important for the donor to ensure that this number is mentioned on the receipt of their donation as well. Additionally, the registration number should have been valid on the date on which the donation was made.