Claiming a deduction under Section 80G of the Income Tax Act, 1961 depends not only on making a donation but also on who the donor is, how the donation is made, and whether statutory conditions are satisfied. Many taxpayers incorrectly assume that donating to a charitable organisation automatically makes them eligible for a tax deduction. In reality, eligibility under Section 80G is governed by clearly defined rules.
This article explains who can claim deduction under Section 80G, the distinction between donor and donee, and situations where the deduction is not available, without discussing eligible donation categories or calculation mechanics.
Who is Eligible to Claim Deduction u/s 80G?
Section 80G adopts a broad approach when it comes to who can claim the deduction. The law allows deduction to any taxpayer who has taxable income and who makes a qualifying donation.
The following categories of taxpayers are eligible to claim deduction under Section 80G:
Individuals
Hindu Undivided Families (HUFs)
Companies
Firms
Any other person or assessee with taxable income
There is no restriction based on employment status or income source. Salaried individuals, professionals, business owners, and corporate taxpayers can all claim Section 80G deduction, provided other conditions are met.
The Importance of Taxable Income
Eligibility under Section 80G is linked to the existence of taxable income. If a taxpayer does not have taxable income in a particular year, the deduction becomes irrelevant, as deductions operate by reducing taxable income.
This means:
Donations made in a year with no taxable income do not provide immediate tax benefit.
Section 80G does not allow carry-forward of deductions to future years.
Donor vs Donee: Understanding the Roles
To understand eligibility under Section 80G, it is essential to distinguish between donor and donee.
Who Is a Donor?
A donor is the person or entity that makes a monetary contribution to a fund, trust, or institution.
The donor:
Claims the deduction under Section 80G
Must ensure that the donation is made to an eligible and compliant institution
Is responsible for maintaining proof of donation
Who Is a Donee?
A donee is the organisation, fund, or institution that receives the donation.
The donee:
Must be registered or approved under Section 80G
Must comply with prescribed conditions
Is required to report donation details to the Income Tax Department
The deduction is allowed only when both donor and donee satisfy their respective conditions.
Conditions the Donor Must Satisfy
Merely being an eligible taxpayer is not enough. To claim deduction under Section 80G, the donor must satisfy certain conditions:
1. Donation Must Be Monetary
Only monetary donations qualify. Donations in kind, such as food, clothes, medicines, or services, are not eligible for deduction under Section 80G.
2. Mode of Payment Matters
While the law permits various modes of payment, cash donations beyond the prescribed threshold are not eligible. This condition applies uniformly to all eligible donors and is aimed at ensuring transparency and traceability.
3. One Donation, One Deduction
If a donor claims deduction under Section 80G for a particular donation, the same amount cannot be claimed again under any other provision of the Income Tax Act. The law follows a strict “one donation, one deduction” principle.
Conditions the Donee Institution Must Fulfil
Eligibility under Section 80G also depends heavily on the status of the donee institution. Even if the donor is eligible, the deduction will not be allowed if the donee fails to meet statutory conditions.
Some key conditions applicable to donee institutions include:
Proper legal registration (trust, society, company, etc.)
Income exemption under applicable provisions
Maintenance of regular accounts
Restriction on use of funds for non-charitable purposes
Compliance with reporting and certification requirements
If an institution loses its approval or fails to comply during the relevant year, donations made to it will not qualify for deduction.
Role of Reporting and Verification
Under the current framework, eligibility for deduction is subject to system-based verification.
Certain donee institutions are required to file prescribed statements with the Income Tax Department containing donor details.
The donor’s deduction claim must match the information submitted by the donee.
Any mismatch may result in denial of deduction or further scrutiny.
This makes it essential for donors to ensure that the institution they donate to is compliant and properly registered at the time of donation.
Can Deduction Be Claimed Under the New Tax Regime?
Eligibility under Section 80G is also affected by the choice of tax regime.
Taxpayers who opt for the new tax regime under Section 115BAC are not eligible to claim deduction under Section 80G. This restriction applies regardless of the amount donated or the nature of the institution.
Therefore, eligibility must be evaluated not only based on the donation but also on the tax regime chosen for the relevant assessment year.
Situations Where 80G Deduction Not Allowed
A taxpayer will not be eligible to claim deduction under Section 80G in the following situations:
Donation made to a non-approved or unregistered institution
Donation made in kind
Cash donation exceeding the permissible limit
Claim made under the new tax regime
Attempt to claim the same donation under another section
Mismatch between donor claim and donee reporting
Understanding these exclusions is as important as understanding eligibility itself.
Key Takeaways
Section 80G deduction is available to all categories of taxpayers with taxable income.
Eligibility depends on both donor compliance and donee approval.
Monetary donations, proper payment mode, and reporting accuracy are essential.
Deduction is not available under the new tax regime.
Eligibility does not guarantee deduction unless all statutory conditions are met.
In the next article, we will examine which donations are eligible under Section 80G and how they are classified.
Reference:
Income Tax Department’s FAQs on Section 80G Deduction dated 18/12/2025