Deduction in respect of donations to certain funds, charitable institutions, etc
28[Deduction in respect of donations to certain funds, charitable institutions, etc.
80G. 29[(l) In computing the total income of an assessee, there shall be deducted, in accordance with and subject to the provisions of this section,—
30[(i) in a case where the aggregate of the sums specified in sub-section (2) includes any sum or sums of the nature specified in 30a[sub-clause (iiia) or in] sub-clause (vii) of clause (a)thereof, an amount equal to the whole of the sum or, as the case may be, sums of such nature plus fifty per cent of the balance of such aggregate; and]
(ii) in any other case, an amount equal to fifty per cent of the aggregate of the sums specified in sub-section (2).]
(2) The sums referred to in sub-section (1) shall be the following, namely : —
(a) any sums paid by the assessee in the previous year as donations to—
(i) The National Defence Fund set up by the Central Government; or
(ii) the Jawaharlal Nehru Memorial Fund referred to in the Deed of Declaration of Trust adopted by the National Committee at its meeting held on the 17th day of August, 1964; or
(iii) the Prime Minister's Drought Relief Fund ; or
31[(iiia) the Prime Minister's National Relief Fund; or]
32[(iiib) the National Children's Fund; or]
33[(iiic) the Indira Gandhi Memorial Trust, the deed of declaration in respect whereof was registered at New Delhi on the 21st day of February, 1985; or]
The following sub-clauses (iiid) and (iiie) shall be inserted by the Direct Tax Lates (Amendment) Act, 1987. w.e.f. 1-4-1989:
(iiid) the rural development fund set up and notified by the Central Government in this behalf; or
(iiie) a trust or institution of national importance referred to in clause (d) of sub-section (I) of section 80F which has as its main object the undertaking of scientific research or carrying out of any rural development programme or any programme of conservation of natural resources or of afforestation of wasteland; or
(iv) any other fund or any institution to which this section applies; or
(v) the Government or any local authority, to be utilised for any charitable purpose 34[other than the purpose of promoting family planning; or]
35[(vi) any authority referred to in clause (20A) of section 10 ; or
36(vii) the Government or to any such local authority, institution or association as may be approved in this behalf by the Central Government, to be utilised for the purpose of promoting family planning;]
37(b) any sums paid by the assessee in the previous year as donations for the renovation or repair of any such temple, mosque, gurdwara, church or other place as is notified by the Central Government in the Official Gazette to be of historic, archaeological or artistic importance or to be a place of public worship of renown throughout any State or States.
(3) No deduction shall be allowed under sub-section (1) if the aggregate of the sums referred to in sub-section (2) is less than two hundred and fifty rupees.
38[(4) Where the aggregate of the sums referred to in sub-clauses (iv),(v),(vi) and (vii) of clause (a) and in clause (b) of sub-section (2) exceeds the smaller of the following amounts, that is to say,—
(i) ten per cent of the gross total income (as reduced by any portion thereof on which income-tax is not payable under any provision of this Act and by any amount in respect of which the assessee is entitled to a deduction under any other provision of this Chapter), and
(ii) five hundred thousand rupees,
then, the amount by which such aggregate exceeds such smaller amount shall be ignored for the purpose of computing the aggregate of the sums in respect of which deduction is to be allowed under sub-section (1).]
39[***]
The following new sub-section (4) shall be substituted for the existing sub-section by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989:
(4) Where the aggregate of the sums referred to in sub-clauses (iv),(v),(vi)and (vii) of clause (a) and in clause (b) of sub-section (2) exceeds ten per cent of the gross total income (as reduced by any portion thereof on which income-tax is not payable under any provision of this Act and by any amount in respect of which the assessee is entitled to a deduction under any other provision of this Chapter), then the amount in excess of ten per cent of the gross total income shall be ignored for the purpose of computing the aggregate of the sums in respect of which deduction is to be allowed under sub-section (1).
(5) This section applies to donations to any institution or fund referred to in sub-clause (iv) of clause (a) of sub-section (2), only if it is established in India for a charitable purpose and if it fulfils the following conditions, namely:—
(i) where the institution or fund derives any income, such income would not be liable to inclusion in its total income under the provisions of sections 11 and 12 or clause (22) 40[or clause (22A)] 40[or clause (23)] 42[or clause (23AA)] 43[or clause (23C)] of section 10 :
44[Provided that where an institution or fund derives any income, being profits and gains of business, the condition that such income would not be liable to inclusion in its total income under the provisions of section 11 shall not apply in relation to such income if,—
(a) the institution or fund maintains separate books ot account in respect of such business;
(b) the donations made to the institution or fund are not used by it, directly or indirectly, for the purposes of such business ; and
(c) the institution or fund issues to a person making the donation a certificate to the effect that it maintains separate books of account in respect of such business and that the donations received by it will not be used, directly or indirectly, for the purposes of such business;]
The following new clause (i) shall be substituted for the existing clause by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989:
(i) where the institution or fund derives any income, such income would not be liable to be included in its total income under the provisions of clause (22) or clause (22A) or clause (23AA) or clause (23C) of section 10, or the trust or institution [other than the trust or institution referred to in sub-clause (iiie) of clause (a) of subsection (2)] is eligible for the deduction under section 80F;
(ii) the instrument under which the institution or fund is constituted does not, or the rules governing the institution or fund do not, contain any provision for the transfer or application at any time of the whole or any part of the income or assets of the institution or fund for any purpose other than a charitable purpose;
(iii) the institution or fund is not expressed to be for the benefit of any 'particular religious community or caste;
(iv) the institution or fund maintains regular accounts of its receipts and expenditure; and
(v) the institution or fund is either constituted as a public charitable trust or is registered under the Societies Registration Act, 1860 (21 of 1860), or under any law corresponding to that Act in force in any parr of India or under section 25 of the Companies Act, 1956 (1 of 1956), or is a University established by law, or is any other educational institution recognised by the Government or by a University established by law, or affiliated to any University established by law, 45[or is an institution approved by the Central Government for the purposes of clause (23) of section 10,] or is an institution financed wholly or in part by the Government or a local authority.
46[(5A) Where a deduction under this section is claimed and allowed for any assessment year in respect of any sum specified in sub-section (2), the sum in respect of which deduction is so allowed shall not qualify for deduction under any other provision of this Act for the same or any other assessment year.]
Explanation 1 : An institution or fund established for the benefit of Scheduled Castes, backward classes. Scheduled Tribes or of women and children shall not be deemed to be an institution or fund expressed to be for the benefit of a religious community or caste within the meaning of clause (iii) of sub-section (5).
47[Explanation 2 : For the removal of doubts, it is hereby declared that a deduction to which the assessee is entitled in respect of any donation made to an institution or fund to which sub-section (5) applies shall not be denied merely on either or both of the following grounds, namely :—
(i) that, subsequent to the donation, any part of the income of the institution or fund has become chargeable to tax due to non-compliance with any of the provisions of section 11, 48[section 12 or section 12A] ;
(ii) that, under clause (c) of sub-section (1) of section 13, the exemption under section 1149[or section 12] is denied to the institution or fund in relation to any income arising to it from any investment referred to in clause (h) of sub-section (2) of section 13 where the aggregate of the funds invested by it in a concern referred to in the said clause (h) does not exceed five per cent of the capital of that concern.
The following new clauses (i) and (ii) shall be substituted for the existing clauses by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989 :
(i) that, subsequent to the donation, the trust or institution has become ineligible for the deduction under section 80F due to non-compliance with any of the provisions of that section;
(ii) that the deduction under section 80F is denied in relation to the application of any income arising to it from any investment referred to in clause (h) of sub-section (4) of that section where the aggregate of the funds invested by it in a concern referred to in the said clause (h) does not exceed five per cent of the capital of that concern;
Explanation 3 : In this section, "charitable purpose" does not include any purpose the whole or substantially the whole of which is of a religious nature.
50[Explanation 4 : For the purposes of this section, an association approved by the Central Government for the purposes of clause (23) of section 10 shall also be deemed to be an institution, and every association or institution approved by the Central Government for the purposes of the said clause shall be deemed to be an institution established in India for a charitable purpose.]
51[Explanation 5 : For the removal of doubts, it is hereby declared that no deduction shall be allowed under this section in respect of any donation unless such donation is of a sum of money.]
(6) 52[***]
28. This section was inserted in place of section 88 which was deleted by the Finance (No. 2) Act, 1967, w.e.f. 1-4-1968.
29. Substituted by the Finance Act, 1976, w.e.f. 1-4-1977. Karlier, it was substituted by the Taxation Laws (Amendment) Act, 1975, w.e.f. 1-4-1976.
30. Substituted tor the following clause (i) by the Finance Act, 19S5, w.e.f. 1-4-1986 :
"(i) in a case where the aggregate of the sums specified in sub section (2) includes any sum specified in sub-clause (vii) of clause (a) thereof, an amount equal to the whole of such sum plus fifty per cent of the balance of such aggregate; and"
30a '"sub-clause (iiia) or sub-clause (iiid) or sub-clause(iiie) or" shall be substituted for "sub-clause (iiia) or in" by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989.
31 Inserted by the Income-tax (Amendment! Act, 1176, with retrospective effect from 9-9-1975.
32. Inserted by the Finance Act, 1982, w.e.f. 1-4-193.
33 Inserted by the Finance Act, 1985, w.e.f. 1-4-1985.
34. Inserted by the Finance Act, 1976, w.e.f. 1-4-1977.
35. Inserted by the Finance Act, 1976, w.e.f. 1-4-1977.
36. For notified institution association under this sub-clause, refer Taxmanns Direct Taxes Circulars. Vol. 1, 1985 edn., p. 515.
37. For complete list of places of public worship, etc.. notified under this clause, refer Taxmann's Direct Taxes Circulars, Vol. 1, 1985 edit., p. 5 15 and Taxmann's Yearly Fax Discs! cv Reference!, 1986 edn., p. 4.101 1987 edn.. p. 3.84.
38. Substituted by the Finance (No. 2) Act, 1980, w.e.f. 1-4-1981.
39. Proviso omitted by the Finance (No. 2) Ait, 1977, w.e.f. 1-4-1978. Original proviso was earlier substituted by the Taxation Laws (Amendment) Act, 1970, with retrospective effect from 1-4-1968.
40. Inserted by the Finance Act, 1970, w.e.f. 1-4-1970.
41. Inserted by the Finance Act, 1973, w.e.f. 1-4-1974.
42. Inserted by the Finance Act, 1987, w.e.f. 1-4-1988.
43. Inserted by the Taxation Laws (Amendment) Act, 1975, w.e.f. 1-4-1976.
44. Inserted by the Finance Act, 1983, w.e.f. 1-4-1984.
45. Inserted by the Finance Act, 1973, w.e.f. 1-4-1974 and shall he omitted by the Direct Tax Laws (Amendment) Act. 1987, w.e.f. 1-4-1989.
46. Inserted by the Finance (No. 2) Act. 1980, with retrospective effect from 1-4-1968.
47. Substituted by the Finance Act, 1970, w.e.f. 1-4-1971.
48. Inserted by the Finance Act, 1972, w.e.f. 1-4-1973.
49. Inserted by the Finance Act, 1972, w.e.f. 1-4-1973.
50. Inserted by the Finance Act, 1973, w.e.f. 1-4-1974 and shall be omitted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989.
51. Inserted by the Finance Act, 1976, w.e.f. 1-4-1976.
52. Omitted by the Finance Act, 1968, w.e.f. 1-4-1969.
[AS AMENDED BY THE FINANCE ACT, 1988]