Donations for charity come under section 80 G of the
Income Tax Act, 1961. This section has classified charity
funds under various heads, each of which give the donor
a different kind of tax rebate. However, please remember,
that for all charity donations the deductions are made
directly from the gross total income of the assessee.
The contributions for charity fall under two broad
A) Those where the total sum donated is deductible
from the assesse's gross income. These donations would
be more beneficial to you, in case you wish to donate
B) Those where only 50% of the amount donated will
be deducted from total income.
According to the section 80 G these funds where 100%
of the amount donated can be deducted are :-
- The Prime Minister's National Relief Fund.
- The Prime Minister's Armenia Earthquake Relief Fund.
- The Africa (Public Contributions-India) Fund.
- The National Foundation for Communal Harmony.
- A University or any educational institution of national
eminence as maybe approved by the prescribed authority.
Please note that the prescribed authority in the case
of a university or non-technical institution. Of national
eminence is Director-General (Income-Tax exemption)
in concurrence with the Secretary, University Grants
Commission. In the case of any technical institution
of national eminence the prescribed authority is the
Director General (Income-Tax Exemption) in concurrence
with the Secretary, All India Council of Technical
- The Maharashtra Chief Minister's Earthquake Relief
- Any Zila Saksharta Samiti constituted in any district
under the chairmanship of the Collector of that district
for the purpose of improvement of primary education
in villages and towns in such a district and for literacy
and post literacy activities.
- The national Blood Transfusion Council or any State
Blood Transfusion council whose sole objective is
the control, supervision, regulation or encouragement
in India of the services related to operation and
requirements of blood banks.
- Any fund set up by a State Government to provide
medical relief to the poor.
- The Army Central Welfare Fund or the Indian Naval
Benevolent Fund or the Air Force Central Welfare Fund
established by the armed forces of the Union for the
welfare of the past and present members of such forces
or their dependants.
- The Andhra Pradesh Chief Minister's Cyclone Relief
- The National Illness Assistance Fund.
- The Chief Minister's Relief Fund or the Lieutenant
Governor's Relief Fund in any State or Union Territory.
- The Government, or any local authority, institution
or association as maybe approved by the Central Government
for the purpose of promoting family planning.
The funds under which donations will qualify for deductions
only upto 50% of the amount donated are :-
- The National Defence Fund set up by the Central
- The Jawaharlal Nehru Memorial Fund.
- The Prime Minister's Drought Relief Fund.
- The Indira Gandhi Memorial Trust.
- The Rajiv Gandhi Foundation.
- The National Sports Fund to be set up by the Central
- The National Cultural Fund.
- The fund for Technology Development and Application
set up by the Central Government.
Within the A and B categories, there are some funds,
where there is a limit to the total contribution you
can make. As a percentage of your gross total income,
you can contribute only upto 10% in these funds. In
the 100% category, the only fund which has this 10%
limit is the donations for the purpose of promoting
family planning. (Mentioned as 14 in the A category).
In the 50% category, the 10% limit is not applicable
to any of the funds mentioned above. It is applicable,
however, to contributions as donations for the renovation
or repair of temples, mosques, gurudwaras, church or
other places notified by the Central Government in the
Official Gazette to be of historic, archeological or
artistic importance, or to be a place of public worship
of renown throughout any state.
Points To Remember
- Definitely, this last category of contributions
prove to be the least attractive in terms of tax rebate,
as not only can you get only 50% tax rebate, you cannot
contribute more than 10% of your gross total income
to this fund.
- The most attractive for tax rebates are A category
funds ranging from serial number 1-13, which have
a 100% tax rebate and have no limit on contributions.
(Of course, the total contribution cannot exceed your
gross total income)
- The second most attractive are the B category funds
(1-8) where there is no 10% limit on the total contribution.
- The third most attractive are those options in which
100% deduction is allowed but there is a 10% limit
on total contribution. (Category A-14)
- In case you are rich and are in a position to donate
lakhs of rupees to a charity, keep in mind one thing.
To make a charity institution strong it needs to add
to its own corpus. If you are a big donor, you can
in most cases give instructions to the charity that
the sum must be used only for the purpose of building
the corpus of the charity institution. Any interest
earned on it could be used for the purpose of the
charitable activities of the organization.
In this way you are sure that you have helped not only
in charity activities, but also reduced the charity's
dependence on outside funds.