Difference Between Section 80G and 80GGA of Income Tax Act Explained

Most of us performed some kind of charitable donation at some point in our life. It must have been a pride to contribute to a cause that we believe in to bring change. Our government stretches its arms of support to us for doing such noble work.

Section 80G and 80GGA of the IT Act covers donations made towards a trust. There are various financial transactions under this Act on which you can claim a tax deduction.

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What Is Section 80G?

Section 80G of the Income Tax Act allows you to claim a tax deduction on a donation made for certain charitable institutions or charitable funds.

However, all types of donations are not qualified for a deduction claim. Donations only made to authorised funds are eligible for this claim. Any taxpayer such as an individual, LLPs, partnerships, company or firm can claim under this section.

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What Is Section 80GGA?

Under section 80GGA of the Income Tax Act, you can claim tax deductions for donations made towards rural developments and scientific research.

Our government introduced this section to offer incentives to the donors. This helps them save money and spread humanitarianism in our country. However, individuals with an income source from a business or a profession are not eligible to claim under this section.

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What Are the Differences Between Section 80G and 80GGA?

The table below clarifies the difference between the Section 80G and 80GGA -

Topic of Difference	Section 80G	Section 80GGA
Definition	Allows claiming a tax deduction for donating to a charitable trust or a relief fund.	Allows claiming a tax deduction for donating to scientific researches and rural development of the country.
Eligibility	Any taxpayer such as an individual, company or firm	A taxpayer who does not have an income source from a business or profession.

Which Transactions Are Admissible Under Section 80G?

Section 80G offers tax relaxation on a certain amount donated to prescribed charitable trust. However, there are a considerable number of charitable trusts that are under the Indian government’s registration.

Henceforth, our government mandates a claim on donation for charitable trusts that have registration under the IT Department.

These include -

Any donations made for funds and trusts created by the Government of India.
Donation for private trusts only who can get registered u/s80G and provide receipts to the donors.
Contributions made for authorised institutions or organisations that involve research functions
Any sum of money donated to fund reliefs raised by the Indian government for any natural hazard

Which Financial Transactions Are Eligible for Exemption Under Section 80GGA?

This section allows claiming a tax deduction if any donation is made to one of the causes mentioned below -

Any amount serving as a donation to an institution like a university, college, or an organisation that specialises in scientific research
Money, any organisation under the National Committee's registration receives, to carry out government-permitted schemes and projects
Donations to a registered organisation that works for rural development
Any contribution raised by our government to support National Urban Poverty Eradication Fund
Donations in rural development funds that the union government has set up.

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Documents Necessary to Claim a Deduction Under Section 80GGA and Section 80G

To claim a deduction under Sections 80G and 80GGA, you need to provide some documents as proof of donations. Following are such documents you are required to have -

Stamped receipts comprising-
- A list of the amounts of donations and the trust’s registered name.
- This must contain the income tax assesse’s name and the registration number that the IT Department designed.
- This receipt must also contain the name, date, PAN, and stamp of the organisation.
- The registration number is the most crucial figure to process the tax exemption.
Form 58 from the organisation is a mandatory document to claim 100% exemptions without any limit.

Note:

Individuals must make donations in only cash or cheque to be eligible for this tax deduction.
Donations under Section 80GGA can be made via cash, draft or cheque. But, donations in cash over a sum of ₹ 2000 aren’t allowed in the form of deductions. 100% of the amount contributed or donated is considered eligible for a tax deduction subject to conditions.

Enormous charitable organisations and research institutions look forward and count on the voluntary contributions of fellow citizens. Our government aims to promote a sense of philanthropy by offering tax deductions on donations through 80G and 80GGA.

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Frequently Asked Questions

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How do I claim a deduction under section 80GGA?

The taxpayer needs to provide a receipt along with their Income Tax Returns. This receipt must contain the name, PAN, address and stamp of the organisation receiving the donation and the amount contributed.

Can I claim a deduction for contributing to any foreign trust under sections 80G and 80GGA?

No, you are not eligible to claim a deduction for contributing to any foreign trust under Sections 80G and 80GGA.

How can the tax savings from donations be calculated under Section 80G?

Use an income tax calculator to calculate the tax savings from donations under Section 80G. Input your total income and the qualifying amount of donations. The calculator will determine the tax savings based on the deductions available under Section 80G.

Difference Between Section 80G and 80GGA of Income Tax Act Explained

What Is Section 80G?

What Is Section 80GGA?

What Are the Differences Between Section 80G and 80GGA?

Which Transactions Are Admissible Under Section 80G?

Which Financial Transactions Are Eligible for Exemption Under Section 80GGA?

Documents Necessary to Claim a Deduction Under Section 80GGA and Section 80G

Frequently Asked Questions

How do I claim a deduction under section 80GGA?

Can I claim a deduction for contributing to any foreign trust under sections 80G and 80GGA?

How can the tax savings from donations be calculated under Section 80G?

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