Claiming tax deduction on donation can be complicated


During the covid-19 crisis, many people helped raise funds for those in need. If an individual had donated to a recognised institution, the act of kindness could help save tax.

However, there are also several conditions one has to meet to avail a tax deduction on donations. The deduction varies with the institution to which the donation is made.

First, not all donations qualify for a tax deduction. Also, you cannot get a 100% deduction for all kinds of donations.


Second, only monetary donations qualify for the deduction. If you have donated in kind — food, clothes, medicines, etc- – it won’t be eligible for a tax deduction.

Third, the only donation made via banking channel qualifies for tax benefit. You should have used a debit card, net banking, cheque or UPI (Unified Payment Interface) for giving money. However, you can claim a tax deduction on donations up to 2,000 made in cash.

Fourth, the tax benefit available depends on the institution or fund to which the money was paid.


You can get a 100% deduction for donations made to PM Cares, Prime Minister’s National Relief Fund, National Defence Fund set up by the Central Government and other such notified trusts, charities and funds.

A 50% deduction is available to Prime Minister’s Drought Relief Fund, Jawaharlal Nehru Memorial Fund, and so on.

For other donations, there’s a cap. For such contributions, taxpayers will first need to calculate their “adjusted gross total income”. They can get a 100% or 50% deduction subject to 10% of the adjusted gross total income.


The adjusted gross total income is calculated by deducting exempt income, capital gains, etc., from the total income.

Also, keep in mind that you will need to have a receipt from the charity you have donated to and its address and PAN.

(Do you have personal finance queries? Send them to [email protected] and get them answered by industry experts)


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