Difference between Section 80G and 80GGA

The Section 80G and Section 80GGA of the Income Tax Act pertains to donations made to charity. There are different financial transactions that are exempt from tax under this act and different proofs are required to be provided to claim the exemptions.

The Income Tax Act,1961 contains a huge list of sections and clauses that determine the tax exemption applicable for various financial transactions. While income tax is levied on incomes of self-employed as well as salaried individuals, Taxpayers on account of certain transactions that they make. Section 80G deals with exemptions related to money donated towards charity. Section 80G came to be included under the Income Tax Act from the year 1967. It is an important section that adds to the social welfare and responsibility of the nation. Let us look into a detailed view of this section and also the sub-sections that fall under it.

What kind of Transactions are Exempted under Section 80G of the Income Tax Act?

Section 80G offers tax exemption on amounts that are donated towards charitable organizations registered with government of India. Tax rebate under section 80G is rolled out to taxpayers only when donations towards these registered charitable organizations are made.

Following are some of the most significant donations that are exempted from tax under section 80G:

  • Donations to private trusts.
  • Donations towards trusts and funds set up by the government of India.
  • Any fund set up by the government for relief in case of various natural calamities.
  • Donations to approved organizations that indulge in research functions.

What Financial Transactions are Exempt from Tax, under Section 80GGA of the Income Tax Act?

Under section 80G comes another sub-section, 80GGA which exempts the money donated towards any of the following causes:

  • Any sum paid to a college, university or organization that is registered with the Income Tax Department and is involved in scientific research
  • Any sum paid towards a registered organization that works for rural development
  • Any sum paid to any organization which is registered with the National Committee, for carrying out eligible projects and schemes of the government
  • Any sum paid by the taxpayer towards rural development fund set up by the central government
  • Any amount paid by the assessee towards National Urban Poverty Eradication Fund set up by the government

Proofs Required to Claim Tax Exemption under Section 80G and 80GGA:

Following are the documents that serve as proof towards donations made under section 80G and section 80GGA of the Income Tax Act.

  • Stamped receipts listing down the amount of donation and the registered name of the trust as well as that of the income tax assessee. On the receipt, the most important figure is the registration number furnished by the Income Tax Department. It is mandatory for processing of tax exemption.
  • PAN of the trust
  • Validity of the trust registration number
  • Copy of 80G certificate

FAQs on Difference between Section 80G and 80GGA

  1. Into how many types are donations categorized under Section 80G?
  2. They are broadly categorized into four types. They are:

    • 100% deduction without any limit
    • 100% deduction subject to a limit
    • 50% deduction without any limit
    • 50% deduction subject to a limit
  3. Can NRIs avail tax deduction under Section 80G?
  4. Yes, they can claim tax deductions under section 80G of the Income Tax Act provided the contribution is made to an eligible institution.

  5. Will I be able to claim deduction for making a contribution to a foreign trust or organization?
  6. No, contributions made to a foreign organization are not eligible for deduction under Section 80G of the Income Tax Act.

  7. Who are eligible to claim deductions under Section 80G?
  8. For donations or contributions made to eligible institutions, individuals, firms, LLPs, partnerships, and companies are eligible to claim tax deductions.

  9. Are donations made in kind eligible for deduction under Section 80G?
  10. As per Section 80G, donations made in kind are not eligible for tax deduction.

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