Taxation Exam  >  Taxation Notes  >  Income Tax for assessment (Inter Level)  >  Section - 80G, 80GG, - Taxation

Section - 80G, 80GG, - Taxation | Income Tax for assessment (Inter Level) PDF Download

Section 80G. Donations

1. Who can claim deduction : The deduction u/s 80G is available to all assessee who make donation in ‘specified fund’. The fund is divided into two categories. Part A fund and Part B fund.

2. Part A fund: Any amount donated irrespective of the gross total income is eligible for deduction. The deduction allowed is either 100% of donation made or 50% of donation made.

Name of fund Deduction allowed
1. National Defence Fund 100%
2. The Army Central Welfare Fund of the Indian Naval Benevolent Fund or
the Air Force Central Welfare Fund.
100%
3. National Sports Fund set up by the Central Government. 100%
4. National Cultural Fund set up by the Central Government. 100%
5. National Foundation for Communal Harmony 100%
6. National State Blood Transfusion Council 100%
7. National Illness Assistance Fund. 100%
8. Zila Saksharta Samiti. 100%
9. Prime Minister’s National Relief Fund. 100%
10. National Eminent University / Educational Institution approved by the prescribed authority. E.g. Delhi University, IIT’s, AIIMS 100%
11. Fund of Technology Development and Application set up by the Central Government 100%
12. National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental
Retardation and Multiple Disabilities
100%
13. National Children Fund. 100%
14. Prime Minister’s Drought Relief Fund. 50%
15. Jawaharlal Nehru Memorial Fund. 50%
16. Indira Gandhi Memorial Trust 50%
17. Rajiv Gandhi Foundation. 50%

 

3. Part B fund: Where maximum permissible limit is specified to the fund. Amount of donated cannot exceed the maximum permissible limit. Maximum permissible limit is 10% of Adjusted Gross Total Income (GTI).

Computation of Adjusted GTI : It includes all incomes except special incomes which are LTCG and STCG (STT paid), exempted incomes and after allowing all deductions u/s 80C to 80U except section 80G.

Name of fund Deduction allowed
1. Donation to Govt. / approved Local Authority, Institution, to be utilised  
a. for promoting family planning 100%
b. for charitable purpose other than promoting family planning 50%
2. Donation to any notified temple, mosque, gurudwara, church or other place
for renovation or repair. E.g. Taj Mahal
50%
3. Donation made by a company to the Indian Olympic association or to an
institute notified u/s 10(23G) for the development of infrastructure for sports
in India or for sponsorship of sports or games in India.
100%

Note : Any donation paid by cash shall be allowed as deduction only if the sum does not exceed Rs. 10,000 per transaction. In order to avail deduction for donation in excess of Rs. 10,000 of each transaction, the mode of payment should be any mode other than cash i.e. by cheque.

Part A fund added by FA 2015

1. The National Fund for Control of Drug Abuse. 100%
2. Swachh Bharat Kosh. स्वच्छ भारत कोष 100%
3. Clean Ganga Fund (Deduction allowed only to domestic donors) 100%

P1: Compute deduction allowed u/s 80G.

  Case 1 Case 2 Case 3 Case 4
Business income 75,000 1,40,000 1,59,000 89,000
LTCG 20,000 80,000 nil 1,000
STCG (STT paid) 5,000 20,000 4,000 19,000
Dividend from Indian Company 12,000 8,900 62,000 52,000
Donation to Govt. for promotion of family planning 8,000 10,000 8,000 nil
Donation to Govt. for charitable purpose nil 6,000 14,000 8,000
PPF contribution 5,000 20,000 4,000 19,000

Ans: 7,000; 11,000; 11,750; 3,500.

Solution:

Computation of Total Income

  Case 1 Case 2
Business income 75,000 1,40,000
LTCG 20,000 80,000
STCG (STT paid) 5,000 20,000
Gross Total Income 1,00,000 2,40,000
Less : Deduction u/s 80C 5,000 (20,000)
Less : Deduction u/s 80G (7,000) (11,000)
Total Income 88,000 2,09,000

Computation of adjusted GTI

   Case 1 Case 2
Gross Total Income 1,00,000 2,40,000
Less : Special Incomes (25,000) (1,00,000)
Less : Deduction u/s 80C (5,000) (20,000)
Adjusted GTI 70,000 1,20,000
10% of adjusted GTI 7,000 12,000
Donation to Govt. for Family planning. Eligible donation 7,000 10,000
Balance donation to Govt. for charitable purpose nil 2,000

Note 1: To get the maximum deduction apportion the amount first to family planning, then the balance amount to charity.
Note 2: Dividend from Indian Company is exempt u/s 10(34), therefore do not form part of taxable income.

P2: Compute total income from the following informations. 

  Case 1 Case 2 Case 3 Case 4
STCG 53,000 1,58,000 53,000 5,000
STCG (STT paid) 3,000 3,60,000 45,000 20,000
LTCG 27,000 40,000 5,000 10,000
LTCG (STT paid) 80,000 9,00,000 70,000 11,111
Interest from Central Govt. Securities 16,000 66,000 nil 10,000
Winning from Games 6,000 3,00,000 50,000 1,18,000
Contribution to Mediclaim of GIC 3,000 3,000 nil nil
Donation to National Defence Fund 2,000 1,00,000 10,000 nil
Donation to Govt. for family planning 3,000 30,000 10,000 nil
Donation to Govt. for charitable purpose 2,000 50,000 10,000 16,000
PPF contribution 15,000 15,000 nil 10,000

Ans: 81,000; 7,65,700; 1,32,850; 1,48,000.

Section 80GG. Deduction in respect of rent paid
1. He lives in a rented accommodation provided by employer or otherwise.
2. He is not in receipt of HRA.
3. He, spouse, minor child or the HUF of which he is a member must not own any RHP at the place where he works or if he owns then he should not claim any concession in respect of SOP for residence u/s 23(2).
4. Amount of deduction

Maximum • Rs. 5,000 p.m. L e a s t
is
deductible
Formula • 25% of adjusted GTI
Formula • Rent Paid – 10% of adjusted GTI

Adjusted GTI (for the purpose of 80GG) is GTI – special income – all deductions u/s 80C to 80U except 80GG.

P1 : Compute total income from the following information:
Basic Salary  -  5,00,000
He is provided with accommodation by employer in Delhi @  - Rs. 70,000
Other Income  - 70,000
PPF contribution  - 1,55,000
Donation to National Fund for Control of Drug Abuse  - 2,50,000

Ans: [5,00,000+5,000+70,000=5,75,000 – 1,50,000–2,50,000–43,750 = 1,31,250]

P2: Calculate the deduction allowed under section 80GG.
Business income  - 55,000
Interest from debentures - 5,000
PPF contribution - 2,000
Payment made for preventive health check up in cash to Fortis Hospital  -  3,000
Rent paid by him for a house occupied by him for the purpose of his residence  - Rs. 1,250 per month. [CA N96]

Ans: 9,500; 45,500.

P3 : Compute his total income from the following information:
Business Income - 5,00,000
Other Income  - 1,50,000
PPF contribution - 1,50,000
Contribution towards pension plan of LIC - 10,000
Donation made to approved charitable purpose in cash - 25,000
Rent paid - 80,000

Ans: [5,00,000 + 1,50,000 = 6,00,000 – 1,50,000 – 30,000 = 4,70,000]
 

P4 : Compute total income : Basic Salary of Mrs. X Rs. 6,00,000. Her employer has taken on rent her own house on a monthly rent of Rs. 15,000 and the same has been provided for residence to Mrs. X. Company is recovering Rs. 2,000 per month as rent of house. She is owning only one house and payment of interest of Rs. 2,25,000 and principal of Rs. 1,00,000 was made for housing loan taken for purchase of house. Loan was borrowed on 1- 4 -1998.

Ans : (Sal : 6,00,000 + 66,000 = 6,66,000) (HP : 1,80,000 – 54,000 – 2,25,000 = – 99,000)

(TI : 6,66,000 – 99,000 = 5,67,000 – 80C 1,00,000 – 80GG 0 = 4,67,000)

The document Section - 80G, 80GG, - Taxation | Income Tax for assessment (Inter Level) is a part of the Taxation Course Income Tax for assessment (Inter Level).
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FAQs on Section - 80G, 80GG, - Taxation - Income Tax for assessment (Inter Level)

1. What is Section 80G in taxation?
Ans. Section 80G in taxation refers to a provision in the Income Tax Act that allows taxpayers to claim deductions for donations made to certain charitable organizations. Under this section, individuals and businesses can avail tax benefits for their donations, subject to certain conditions and limits.
2. What is the eligibility criteria for claiming deductions under Section 80G?
Ans. To be eligible for claiming deductions under Section 80G, the following conditions must be met: - The donation must be made to a registered charitable organization or trust. - The organization must have been approved by the Income Tax Department to avail tax benefits. - The donation must be made in the form of cash, cheque, or draft. Donations made in kind or through online platforms may or may not be eligible. - The amount of donation eligible for deduction varies based on the organization and the limit specified under Section 80G.
3. What is Section 80GG in taxation?
Ans. Section 80GG in taxation allows individuals who do not receive house rent allowance (HRA) to claim deductions for the rent they pay for accommodation. This provision is applicable for individuals who do not own a residential property and do not receive any housing-related benefits from their employer.
4. What are the conditions to claim deductions under Section 80GG?
Ans. To claim deductions under Section 80GG, the following conditions must be met: - The individual must be a salaried or self-employed taxpayer. - The individual must not receive HRA or any other housing-related benefits from their employer. - The individual or their spouse or minor child should not own a residential property in the location where they reside or work. - The individual must provide a declaration in Form 10BA specifying the details of the rented accommodation and the rent paid.
5. What are the limits for deductions under Section 80GG?
Ans. The maximum deduction available under Section 80GG is limited to the least of the following three amounts: - 25% of the total income of the individual for the relevant assessment year. - Rs. 5,000 per month. - The actual rent paid minus 10% of the total income of the individual.
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