Under the Income Tax Act, certain contributions or donations are eligible for a tax deduction under Section 80G.

Only donations made to charities prescribed under category 80G are eligible for an 80G deduction. Charities with a religious or business angle are not typically granted 80G certification.

80G of the Income Tax Act declares that contributions to the funds should be made in the form of cheques or demand drafts. In case of a cash contribution, the amount should be below Rs. 10,000 for it to be eligible for a tax deduction.

An 80G certification is one that is granted to certain not-for-profit organisations by the Income Tax Department, granting their donors the ability to avail of a tax deduction on donations.

To apply for an 80G certificate, however, the organisation must first have a 12A certificate. Only NGOs and non-profitable institutions with a 12A certificate are eligible for 80G certification.

In order to get an 80G certificate, the organisation has to fill in Form 10G and attach its activity report for the past one to three years, with an audited statement for the past three years, or even from the date of establishment in certain cases. The form for 80G registration is available on the IT department website. After scrutinising your application, the activity report and audited statement, an IT officer will pay a visit to your premises for an inspection.

The 80 G certification not only provides the donors with a tax exemption on the amount donated (depending upon the annual income of the donor), but also gives tax benefits to the non-profitable organisation.

The institution can get an exemption of 10% for the gross income earned through donations and contributions.

Eligibility for 80G Certification

  • Separation of Business & Charity
  • No Misuse
  • No Religious Activity
  • Proper Accounting

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