Taxpayers claiming deductions under Section 80G of the Income-tax Act will now be required to provide additional payment details while filing their income tax return for Assessment Year 2026-27. According to reports from Mint, the new disclosure includes the transaction reference number for UPI, NEFT, RTGS, IMPS or cheque payments, along with the IFSC code of the remitting bank. These details are mandatory for donations made through non-cash modes, as part of the Income Tax Department's push to digitally verify deduction claims. As reported by Financial Express, the additional reporting requirement has been introduced across ITR-1, ITR-2, ITR-3 and ITR-4 forms wherever Section 80G deductions can be claimed, with the information sought being broadly similar across forms to capture payment particulars that enable electronic verification of deduction claims.
The additional disclosure requirement has been introduced across ITR-1, ITR-2, ITR-3 and ITR-4 forms wherever Section 80G deductions can be claimed. As reported by Mint, the change aims to enable electronic verification of deduction claims by linking them to banking records, rather than relying solely on the amount declared by the taxpayer. While the eligibility conditions for claiming a deduction under Section 80G remain unchanged, taxpayers will now have to provide a digital payment trail to support their claim. According to Grant Thornton Bharat's Akhil Chandna, this represents a shift from merely declaring the donation amount to establishing a verifiable payment trail that can be electronically validated during return processing. The objective behind these changes is clear - tax administration is increasingly relying on digital information available from banks, employers, financial institutions and other reporting entities, with return processing now driven by automated validations and data matching.
For FY 2025-26, charitable institutions were required to file Form 10BD by May 31, with Form 10BE generated only after this filing. Under the Income-tax Act, delay in furnishing Form 10BD attracts a fee of ₹200 per day, while the assessing officer may levy a penalty ranging from ₹10,000 to ₹1 lakh. The Income Tax Department matches the deduction claimed in the return with the information reported through Forms 10BD and 10BE, and any mismatch may result in the deduction being disallowed during return processing. Taxpayers claiming a deduction under Section 80G should ensure they have Form 10BE, the donation certificate issued by the charitable institution, and retain the payment proof and donation receipt while filing their return. Unlike Section 80C, there is no single overarching ceiling on how much can be claimed under 80G, with limits varying institution by institution.
Section 80G does not allow deductions for cash donations exceeding ₹2,000. To qualify for the deduction, such donations must be made through banking or digital payment modes such as cheque, bank transfer, UPI, net banking or debit and credit cards. Taxpayers should also retain the payment proof and donation receipt while filing their return. The deduction is available only under the old tax regime, as taxpayers opting for the new tax regime under Section 115BAC cannot claim deductions under Section 80G. Taxpayers filing ITR-2 and ITR-3 are also required to separately disclose the total deduction claimed under Section 80G in the relevant field of the return. Expenditure incurred towards Corporate Social Responsibility (CSR) under the Companies Act, 2013, is not eligible for deduction under Section 80G, nor are donations made to political parties.
Before filing the return, taxpayers should maintain the following documents: donation receipt issued by the charitable institution, bank statement or payment confirmation, transaction reference number, IFSC code of the remitting bank, and duplicate receipt from the charitable institution if required. According to Cleartax, taxpayers should ensure that the charitable institution is approved under Section 80G, as donations to organisations that are not eligible under the provision cannot be claimed as deductions. Unlike salary income or tax deducted at source (TDS), charitable donations generally do not appear in the Annual Information Statement (AIS), Form 26AS or the Taxpayer Information Statement (TIS), requiring taxpayers to reconcile their claims using donation receipts and banking records. As reported by Financial Express, it is advisable to verify that the charitable institution is approved for claiming a deduction under Section 80G and that the amount claimed is eligible under the applicable provisions. Taxpayers should also remember that cash donations are subject to statutory restrictions and should carefully verify all particulars before submitting the return.
