Section 80GGA of the Income Tax Act specifies that deductions may be made for contributions to rural development and scientific research. Any corporation, entity, business or any other party may demand the deduction under this provision. This deduction is not permitted to anyone who has a business or professional income.

Donations may be made by check, currency, or draft. Any cash donation in excess of Rs 10,000 isn’t really permissible for deduction under such a clause. Alternatively, 100% of the money raised would be qualified for deductions.

Section 80GGA

Donations eligible u/s 80GGA

Below are the amounts available for deductions under this section.

  • Amount paid to the Rural Development Fund.
  • Any amount is given to the research association which undergoes scientific research.
  • Sum gave to any college, university or institution used only for scientific study authorized by the jurisdiction.
  • Amount paid to the authorised organization that undertakes the rural development programme.
  • Any amount paid to the approved association which undergoes the training of persons for the implementation of rural development programmes.
  • Any contribution made to an authorised institution, public sector corporation or local authority to carry out projects u/s 35AC.
  • Any afforestation fund.
  • Amount paid to the National poverty eradication fund.

Important certificate for claiming deduction under section 80GGA

The taxpayer is expected to submit a certificate referred to as Form 58A from the payer according to Rule 110 of the Income Tax Rules of 1962. This certificate normally contains all details relating to the amount given by the taxpayer in the preceding year towards any local authority, public sector corporation or entity authorised by the national committee responsible for carrying out the scheme or programme.

The certificate must be provided by the association to the following effect:

  • The scheme should include work for any construction of a foundation or a house or a road or a well. The framework will be used as a hospital, welfare centre or pharmacy, and so on. Work can also include the construction of a machine or plant. All such work should begin before 1 March 1983.
  • Any rural development program authorized by the specified authority started before 1 March 1983.

In the event that the organization where the gift is made engages in the preparation of individuals, the award must be certified with the following details intact.

  • The organisation to which the donation is made should be accepted by the Authority prior 1 March 1983.
  • Training of individuals for any rural development project must be undertaken by the institution prior 1 March 1983.

Documents required for claiming tax exemption u/s 80GGA

Several requirements need to be met and the records are to be issued by the assessee in order to demand the deductions referred to in section 80GGA. These records act as evidence of the donations made by the donor. The papers shall be as follows:

  • Receipts stamped, with the registered name of the trust where the contribution was made, the name of the taxpayer’s and the amount of the donation. The receipt should have the identification number issued by the revenue tax department. The number is quite necessary to be given upon issuance of a tax exemption.
  • Documents concerning receipt of a cheque or cash to make a gift liable for a tax exemption. Several banks also make possible online contributions with tax receipts. Money donated in-kind really aren’t eligible for any other kind of tax exemption.
  • Any sum greater than  ₹10,000 in cash as contributions shall not be allowed for deductions u/s 80G. That being said, where an amount greater than this cap is contributed by means of cheque or drafts or by means of online banking transactions, it is qualified for exemption under such a provision.