I donated to a charity with 80G approval. Why is my deduction less than half of what I gave?
Because 80G has two independent restrictions. First, most donations to ordinary charitable trusts fall in the 50% category. Second, those donations are also capped at 10% of your adjusted gross total income. And any cash donation above Rs 2,000 gets nothing at all.
Section 80G sorts every eligible donation into one of four boxes, and the box decides the arithmetic. Two boxes have no qualifying limit: donations that get 100% deduction outright, such as the National Defence Fund, the Prime Minister's National Relief Fund, PM CARES and the Swachh Bharat Kosh; and donations that get 50% outright, such as the Prime Minister's Drought Relief Fund and certain memorial trusts. Two boxes are subject to a qualifying limit: donations that get 100% but only within the ceiling, principally family planning contributions and, for companies, certain sports development payments; and donations that get 50% within the ceiling, which is where almost every ordinary approved charitable trust, temple, mosque or NGO sits.
The ceiling is 10% of your adjusted gross total income. That is not your gross total income. You start from gross total income and strip out all the Chapter VI-A deductions except s.80G itself, exempt income, long-term capital gains, and income of non-residents and foreign companies taxable at special rates. The number left is the base; 10% of it is the maximum donation that can be considered in the two limited boxes.
So the order of operations matters. You do not take 50% of your donation and then test it against 10%. You first cap the qualifying donation at 10% of adjusted gross total income, and then apply the 50% or 100% rate to whatever survives the cap. A person with Rs 10,00,000 of adjusted gross total income who gives Rs 3,00,000 to a 50%-with-limit trust has a qualifying amount of Rs 1,00,000, and a deduction of Rs 50,000 — one-sixth of what was given.
The cash rule is separate and unforgiving. A donation made in cash above Rs 2,000 is not eligible for deduction at all. This is not a partial disallowance of the excess: the donation fails. Anything above Rs 2,000 has to go by cheque, bank transfer, card or UPI. Donations in kind — food, clothes, medicine, equipment — get nothing under s.80G whatever their value, because the section deducts sums of money.
On documentation, the practical trigger is now reconciliation rather than the paper receipt. The donee institution reports donations and issues a certificate in Form 10BE; your claim in the return needs to line up with what the institution has reported, or the deduction is liable to be questioned at processing. Keep the receipt showing your name and address and the institution's registration number as well.
And the whole section is an old-regime item. Neither an individual nor an HUF can claim s.80G while being taxed under s.115BAC, so for anyone on the default new regime the arithmetic above never starts.
Donors budget on the headline — '80G approved, 50% deduction' — and are then surprised when the actual saving is a fraction of that. Getting the qualifying limit wrong inflates the claim and produces an adjustment under s.143(1). Getting the cash rule wrong loses the deduction outright on money that has already gone.
The Commissioner has cancelled my trust's registration because some corpus donations are said to be bogus — can he do that when the money was actually spent on the trust's objects?
I donated to a trust that runs schools and hospitals but also has an object of maintaining places of worship. Do I still get the section 80G deduction?
I built a structure for a temple at my own cost instead of handing over money. Can I claim the s.80G deduction for what I spent?
The CIT (Exemptions) refused our trust's registration under s.12AB because the trust deed has no irrevocability or dissolution clause, and treated our 'Yes' in Row 6 of Form 10AB as false information. Is that a lawful ground of refusal?
Our trust is religious and charitable and holds 80G approval. Can the officer tax our hundi collections under s.115BBC?
My Form 10AB was rejected before April 2024 because it was late or filed under the wrong section code. Is that rejection the end of the matter?
Your APA year has been reopened and the officer has himself re-examined whether you complied with the APA. Can he do that without a compliance audit by the Transfer Pricing Officer?
My Form 10AB under s.80G(5) was one day late and the Commissioner rejected it, saying he has no power to condone. Is a delay of one day really fatal?
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