How to donate to an NGO in India and claim your 80G tax deduction

Section 80G of the Income Tax Act, 1961 lets an Indian taxpayer claim a deduction on donations to eligible non-governmental organisations. In practice this means a large share of what you give to a registered NGO comes back to you at the end of the financial year. The rules are simple once you know them, and worth knowing before you write the cheque.

This is a straight walk through of how the deduction works, what to collect at the time of donating, and what the common mistakes look like.

What Section 80G actually is

Section 80G is the provision that gives a tax deduction for donations to approved charitable institutions. It sits alongside Section 12A, which is the registration that confers charitable status on the organisation itself. The two go together. An NGO that is only 12A registered is a valid charity, but donations to it are not automatically deductible. An NGO that is both 12A and 80G registered is a valid charity to which donations qualify for a deduction under Section 80G.

Since 2021, every 80G registered institution is issued a sixteen digit Unique Registration Number, called the 80G URN. That URN is what makes a receipt valid at the point of your income tax return.

How much of your donation you can claim

Section 80G organisations fall into two broad categories:

• 100% deduction. Certain government funds and specified institutions (Prime Minister's National Relief Fund, National Defence Fund, and a short list of others) allow the full amount to be deducted.
• 50% deduction. This is the bucket that most private NGOs, including Nikhaar Foundation, sit in. Half of the eligible donation amount reduces your taxable income.

For most private NGOs there is also a qualifying limit: the aggregate deduction under Section 80G is capped at ten per cent of your adjusted gross total income. For most individual donors this cap never binds.

The documents you need at the time of donating

Before parting with the money, the receipt you should expect back from the NGO must carry:

• The NGO's registered name
• The NGO's PAN
• Their 80G registration number and, since 2021, the sixteen digit 80G URN
• Your name, PAN, and address as the donor
• The mode of payment (UPI, NEFT, cheque, and so on)
• The transaction reference from your bank or UPI app
• The date and the amount

A receipt without the URN is not going to survive scrutiny. This is worth checking before the donation, not after.

How to donate and claim, step by step

1. Pick a 12A and 80G registered NGO. You can verify registration on the Income Tax Department's e-filing portal or ask the NGO for the certificates.
2. Avoid cash for donations above two thousand rupees. Under Section 80G(5D), cash donations above that threshold are not eligible for deduction. Use UPI, NEFT, IMPS, RTGS, or cheque instead.
3. Transfer the money. Keep the transaction reference or UTR from your bank or UPI app.
4. Email the NGO with your PAN and the transaction details. A properly run NGO will issue a digitally signed receipt within a working day or two.
5. File your return. Report the donation in Schedule 80G of your Income Tax Return. Enter the NGO name, PAN, address, amount, and mode of payment. The utility will calculate the deduction.
6. Retain the receipt. The Income Tax Department can ask for the receipt during assessment. Keep it with your ITR papers for at least six years.

What to look for in an NGO before you give

Registration status is a floor, not a signal of quality. The floor matters. Above it, a serious donor should look for:

• A public statement of what the NGO does, in what geography, for whom
• Photographs and reports from actual delivered work, not renderings or stock imagery
• A specific way to give, with bank and UPI details published rather than gated behind a form
• A named human you can email if you have a question
• A modest administrative footprint. Large overheads signal a large organisation, not necessarily a bad one, but as a small donor you get more leverage in a smaller one

Common mistakes that void the deduction

• Cash above two thousand rupees. Not eligible. Split into smaller cash donations does not fix this.
• Anonymous donations. If the receipt does not carry your PAN, the deduction may not survive scrutiny.
• Wrong 80G registration number. Cross check the URN on the receipt against the NGO's certificate.
• Donating to unregistered organisations. Warm intent is not the same as a valid deduction.
• Foreign source contributions to a non-FCRA holder. If you are giving from outside India or through a foreign source, the NGO needs a separate Foreign Contribution Regulation Act (FCRA) registration. Ask before you transfer.

An honest word on why Nikhaar Foundation is worth considering

Nikhaar Foundation is registered under Section 12A and Section 80G, with an 80G URN of AAGCN8863PF20241, and is CSR-1 registered with the Ministry of Corporate Affairs (registration number CSR00107287). Our programmes run in Delhi's underserved neighbourhoods and cover water conservation, clean air, and children's education and welfare. If you would rather see the work first, our impact page is the shortest route in. If you are ready to give, the account and UPI details, along with the 80G receipt flow, are on our donate page.