Tax deductions for donors (formerly 80G)

A donor can deduct part of a gift to an approved NGO from their taxable income. Since 1 April 2026 the deduction is under Section 133 of the Income-tax Act, 2025, which replaced section 80G of the 1961 Act: for most NGOs it is 50% of the gift, counted only up to 10% of the donor’s income, and only for donors who aren’t on the default tax regime.

That is narrower than many donors expect, and narrower than many NGO websites suggest. This guide explains how the deduction works, which gifts get 50% and which 100%, how the 10% limit is worked out, who can’t claim, what donors need from the NGO, and what the NGO must do to keep its approval. It is for donors, fundraisers and NGO finance teams.

How the deduction works

A deduction reduces the income on which tax is worked out. It isn’t a refund of the gift. If a donor’s deduction is ₹25,000 and their tax rate is 20%, their tax falls by ₹5,000, a little more once cess is counted.

Two permissions are involved, and they are often confused:

• The NGO’s approval, under Section 354 (formerly the second proviso to section 80G(5)). Only a registered non-profit organisation can be approved, and the approval has its own validity and renewal dates.
• The donor’s deduction, under Section 133 (formerly section 80G), which the donor claims in their own return.

Which gifts get 50% and which get 100%

The “100% off” that donors hear about applies to listed government funds, not to ordinary NGOs. A few 100% categories, and the other 50% categories in Section 133(1)(b), also count only up to the 10% limit; check the category before you rely on it.

The 10% limit, worked through

Gifts to approved NGOs count only up to 10% of the donor’s adjusted gross total income. Section 133(7)(a) defines that as gross total income less any part of it on which no tax is payable and less the donor’s other deductions in the same chapter of the Act. The limit applies to the gifts, before the 50% is taken.

Who can’t claim

• Individuals on the default regime. The default (new) tax regime works out income without the Chapter VIII deductions except a few named ones (Section 202(2)(a)(xii)), and Section 133 isn’t among them. The default regime applies unless the individual chooses the old one, and only those who choose the old regime can claim.
• Cash over ₹2,000. A cash gift above ₹2,000 gets no deduction at all, not even for the first ₹2,000. UPI, cheques, drafts, cards and bank transfers are fine.
• Gifts in kind. Food, books, equipment or a donor’s time get no deduction, however useful they are (Section 133(4)).
• Gifts the NGO doesn’t report. The deduction is allowed only on the basis of the NGO’s statement of donations, subject to risk-based checks (Section 133(6)). If the NGO doesn’t file it, or files the wrong PAN, the claim fails.
• Gifts to an NGO whose approval has lapsed. Ask for the current approval order and check its dates.

Companies on the normal tax rates can claim Section 133 for ordinary donations, within the same limits. Companies on the concessional rates, the 22% option in Section 200 (formerly section 115BAA) and the 15% option in Section 201, can’t: those regimes allow no Chapter VIII deductions other than Sections 146 and 148.

What donors need from the NGO

• A Form 114 certificate (formerly Form 10BE), generated on the e-filing portal after the NGO files its statement of donations in Form 113 (formerly 10BD), or issued at the time of the gift with a pre-acknowledgement number from the portal. It shows the NGO’s approval number. An ordinary receipt is useful for your records, but the claim rests on the NGO’s statement and the certificate.
• Your ID on the statement. Give the NGO your PAN when you donate. The official manual lists PAN, passport number, voter ID and a foreign tax number as accepted IDs; it doesn’t list Aadhaar.
• The right timing. For tax year 2026-27, NGOs must file Form 113 by 31 May 2027. Donations made in 2025-26 were reported in Form 10BD under the 1961 Act.

The NGO’s side of this is in donation statements and certificates.

Company donations and CSR

A company’s CSR spending isn’t a deductible business expense: Section 34(2)(b) of the 2025 Act keeps the rule that was Explanation 2 to section 37(1). Whether a company can instead claim a Section 133 deduction for a CSR contribution to an approved NGO is contested. The question matters only for companies on the normal rates, since those on the concessional rates can’t claim Section 133 at all.

The Act excludes CSR money only from the deductions for the Swachh Bharat Kosh and the Clean Ganga Fund. Under the 1961 Act, the Bangalore bench of the Income-tax Appellate Tribunal held in Goldman Sachs Services Pvt. Ltd v. JCIT (assessment year 2015-16) that, because 80G had only those two exclusions, other CSR contributions could qualify if the conditions were met, and sent the case back for fresh examination. No ruling under the 2025 Act was found. Companies should take tax advice before claiming; CSR and income tax explains the company side.

For NGOs, the practical point is simple: CSR teams often still ask for an “80G certificate”, and Form 113 has a separate donation type for CSR funds.

What the NGO must do to keep its approval

The approval under Section 354 depends on conditions (Section 354(1)):

1. The NGO isn’t for the benefit of any particular religious community or caste.
2. It was established in India for a charitable purpose, and spends no more than 5% of its total income on religious purposes.
3. Its rules don’t let it transfer assets for non-charitable purposes.
4. It keeps regular accounts.
5. It files a statement of donations, and corrections where needed.
6. It gives each donor a certificate.

Timelines (Section 354(2)): provisional approval lasts three tax years for an organisation that hasn’t started its activities; regular approval lasts five tax years, with no ten-year option; renew at least six months before it expires. The forms are the same as for registration, Forms 104 to 107. Approvals under the old section 80G(5) continue until they expire (Section 355(b)). See income-tax registration for the forms and deadlines.

Common mistakes

• Claiming 100% for an ordinary NGO.
• Taking large cash gifts and promising a deduction.
• Forgetting the default regime, so donors expect a saving they can’t get.
• Not collecting PAN, or recording it wrongly, so the claim doesn’t match.
• Letting the approval lapse while still printing “80G” on receipts.

Every donor’s position depends on their own income and regime, so donors with large gifts, or companies giving CSR money, should ask a chartered accountant before they rely on a deduction.