According to reports from Mint, not all donations qualify for 100% tax exemption under the old tax regime. The categories for tax deduction are based on the recipient organization, with some donations entitled for 100% deduction without qualifying limit and others for 50% deduction without qualifying limit. Additionally, there are donations entitled for 100% deduction subject to 10% of adjusted gross total income and those for 50% deduction subject to qualifying limit. Taxpayers must check the deduction limit on their donation receipt and claim deduction accordingly while filing their return.
As reported by Mint, donations eligible for 100% deduction without limit include contributions to the National Defence Fund set up by the Central Government, Prime Minister's National Relief Fund and PM CARES fund, National Foundation for Communal Harmony, and approved universities of national eminence. Other qualifying organizations include Zila Saksharta Samiti constituted in any district, National Illness Assistance Fund, National Blood Transfusion Council, and various state-level relief funds such as Chief Minister's Relief Fund and Army Central Welfare Fund. The list also includes specialized funds like Swachh Bharat Kosh and Clean Ganga Fund, applicable from FY 2014-15 onwards.
According to Mint, Section 80G provides tax deductions for donations to approved funds, trusts, and charitable institutions, with donations in kind not qualifying for deductions. Taxpayers must obtain a 10BE certificate from the donee institution to claim deduction on donations under Section 80G. Section 80GGC details tax deductions for donations made by taxpayers to political parties or electoral trusts with the aim to promote transparency in electoral funding. Taxpayers must separately disclose contributions made to political parties in Schedule 80GGC, providing details such as contribution amount, transaction reference numbers, and bank IFSC codes. Recent ITAT cases have highlighted the importance of proper verification, with tribunals remanding cases back to assessing officers when bank transaction details were not properly verified.
As reported by Mint, donations eligible for 100% deduction subject to 10% of adjusted gross total income include contributions to the government or approved local authorities for family planning promotion and company donations to the Indian Olympic Association or other notified institutions for sports infrastructure development in India. The partial exemption category also includes donations to various state-level earthquake relief funds, with specific provisions for Gujarat earthquake victims (contributions made between January 26, 2001, and September 30, 2001) and Prime Minister's Armenia Earthquake Relief Fund.
For NGOs seeking to provide tax benefits to donors, Section 80G registration is essential as donations without 80G status result in zero income-tax benefit for donors, significantly impacting repeat giving rates. NGOs must hold a valid 12A (or 12AB) registration before applying for 80G, with every donation above ₹2,000 (in aggregate per donor per FY) requiring reporting in Mismatch consequences. Key compliance requirements include maintaining a complete donor register with PAN for donations above ₹2,000, filing Form 10BD by 31 May annually and issuing 10BE certificates, and filing ITR-7 with Schedule J disclosure of donations. Since 2021, both 12A and 80G applications are processed through the same Form 10A on the income-tax e-filing portal, with provisional registration valid for 3 years and regular registration for 5 years.
