Section 80G of the Income Tax allows deduction from taxable income in respect of donations paid to approved funds and charities. Let’s find out how you can save tax while giving to charity.

To claim benefits under Section 80G, you should contribute to a fund or charity

  • Approved by the Government of India

  • Having a valid registration certificate

  • Issues a valid receipt with PAN and address

Benefits under Section 80G
80G donations

80G donations should be made by

  • Digital payment methods,

  • Cheque or

  • Cash

If paid in cash, a maximum deduction of INR 2000 is allowed.

The deduction allowed varies according to the eligibility of the organization you are donating to and it falls under one of the following categories:

  • 50% deduction with upper limit

  • 50% deduction without upper limit

  • 100% deduction with upper limit

  • 100% deduction without upper limit

Deduction allowed 80G

If a limit is applicable, it is calculated as 10% of the Gross Adjusted Income.

Section 80G Give to charity

Where Gross adjusted income is calculated as:

Gross Income (Gross Earnings + OtherIncome) –
all exempted incomes-
long term capital gains –
all deductions under Section 80C to 80U except 80G

Note: If you are donating to a Foreign trust or political party, you cannot claim it under Section 80G. But, you can claim it under Section 80GGC.

Now, let’s use the income tax calculator to see how much tax you can save while contributing to charity.

Step 1: Open the income tax calculator

Step 2: Key in your salary details


Step 3: Declare your investments

Declaration of investments

Step 4: Now, compute income tax

Compute Income Tax

As per the calculation, you have a total tax liability of INR 100000

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Step 5: Declare your Section 80G contributions

Declare 80G Contribution

I have made a contribution of INR 20000 to MicroCharity. Donations to MicroCharity allows a 50% deduction with no upper limit.

Step 6: Calculate income tax again

Calculate Income tax

As you see, the total tax liability has come down by INR 2080

Step 7: Declare another Section 80G contribution

Declare 80G Contribution

As seen above, I’ve contributed INR 20000 to Clean Ganga Fund. Donations to this fund allows a 100% deduction with no upper limit.

Step 8: Calculate income tax again

Calculate Income Tax

As a result, the total tax liability has come down by INR 4160

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In conclusion, Section 80G allows you to claim tax benefits on contributions made to approved funds and charities. Also brings down your income tax by up to 30% of the contributions you make.