Circular No. 777

534. Submission of certificate for claiming deduction under section 80G in respect of donations made by an employee to the National Defence Fund, the Army Central Welfare Fund, the Indian Naval Benevolent Fund, the Air Force Central Welfare Fund

What this is

Circular No. 777 was issued by the Central Board of Direct Taxes on 1 July 1999. Its subject is 534. Submission of certificate for claiming deduction under section 80G in respect of donations made by an employee to the National Defence Fund, the Army Central Welfare Fund, the Indian Naval Benevolent Fund, the Air Force Central Welfare Fund.

What it does

Allows an employee who donates to the National Defence Fund, the Army Central Welfare Fund, the Indian Naval Benevolent Fund or the Air Force Central Welfare Fund through his employer to claim the section 80G deduction on the strength of a certificate issued by the drawing and disbursing officer or the employer, instead of a certificate from the recipient fund.

Why it was issued

Because of the developments in Kargil and nearby areas, employees of Government, public sector undertakings, private companies and local authorities were donating through their organisations; as the organisation remitted a single consolidated cheque, individual employees could not obtain a certificate from the fund.

Who it reaches

Employees donating to the named defence and service welfare funds through their employer
Drawing and disbursing officers issuing donation certificates
Employers remitting consolidated contributions to those funds

The provisions it speaks to

Left, the provision of the Income-tax Act, 1961 as the instrument itself names it. Right, the section of the Income-tax Act, 2025 that the department’s own concordance maps it to — which is where the same ground is now covered.

Under the 1961 Act	Now
s.80G	s.133, s.332, s.354

The instrument, as the Board published it

The words below are the department’s own, reproduced from its published text. Where the department’s copy carried a publisher’s notes after the instrument, those are not reproduced.

534. Submission of certificate for claiming deduction under section 80G in respect of donations made by an employee to the National Defence Fund, the Army Central Welfare Fund, the Indian Naval Benevolent Fund, the Air Force Central Welfare Fund
In view of the unforeseen and unavoidable developments taking place in Kargil and nearby areas, employees of Central Government, State Governments, Public Sector undertakings, Private Sector Companies and Corporations, and local authorities are making donations to the National Defence Fund and other funds, as referred to above, set up by the Central Government/Armed Forces of the Union, through their respective employers/organisations. An employee who is making such donations is eligible to claim deduction under section 80G of the Income-tax Act, 1961 on the basis of the certificate issued by the recipient organisation. However, it may not be possible for every employee to obtain a certificate in respect of donations made through their organisation since the contributions to the fund(s) will be made in the form of a consolidated cheque. It is, therefore, clarified that the claim in respect of such donations as indicated above will be admissible under section 80G of the Income-tax Act, 1961, on the basis of the certificate issued by the DDO/Employer, in this behalf.
Circular : No. 777, dated 1-7-1999.

What to watch

The concession is tied to the four funds named and to donations routed through the employer by consolidated cheque; it is not a general substitute for the donee's certificate under section 80G.
The employer's certificate replaces only the proof of donation - the other conditions of section 80G still have to be met.
Written for the Kargil-period collections of 1999; nothing in it fixes a later date.

Where you meet it

When an Assessing Officer disallows a section 80G claim for want of a receipt from the fund, and when an employer gives credit for such donations in computing salary TDS.

On the same provision

Other instruments in this library that name the same provision of the 1961 Act. They are not necessarily still operative, and a later one may have replaced an earlier one without saying so.

Circular No. 6/2026 — Condonation of delay in filing Form No. 10AB electronically for approval under clause(ii) of the first proviso to sectio 2 July 2026
Notification No. 166/2025 [F. No. 300176/2/2025/ITA-I] / SO 5551(E) — Minstry of Finance 2 December 2025
Notification No. 40/2024 [F. No. 176/2/2023-ITA-I] / SO 1771(E) — 2 the Gazette of INDIA : Extraordinary [Part Ii—sec. 3(ii)] 23 April 2024
Notification No. 34/2023 [F. No. 370142/13/2023-TPL] / GSR 399(E) — Ministry of Finance 30 May 2023
Notification No. 29/2022 [F. No.176/2/2022-ITA-I] / SO 1770(E) — 2 the Gazette of INDIA : Extraordinary [Part Ii—sec. 3(ii)] 11 April 2022
Notification No. 36/2021 [F. No. 176/1/2021/ITA-I]/SO 1698(E) — 2 the Gazette of INDIA : Extraordinary [Part Ii—sec. 3(ii)] 23 April 2021

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A circular binds the department, not you and not a court. The Board issues a circular to its own officers. An assessee may hold the department to a circular that helps him; the department cannot hold an assessee to one that hurts him, and the Tribunal and the courts decide the law for themselves.

Source: the Income Tax Department’s own published text — its page for this instrument.