Section 80G: Deduction in respect of donations to certain funds, charitable institutions

By | February 12, 2016

In order to attract contributions to certain charitable funds and organizations established by the government it offers tax exemption on amounts you donate to them. These are covered u/s 80G.

Under this section deductions are classified into four types:

i) 100% deduction on donation

ii) 50% deduction on donation

iii) 100% deduction subject to qualifying limit

iv) 50% deduction subject to qualifying limit

Here qualifying limit refers to 10% of adjusted gross total income (total income after all deductions have been accounted for except u/s 80G and less of capital gains). This means the deduction can be 50% (or 100%) of the donation amount with maximum limit of 10% of your adjusted gross total income.

List of funds or organizations eligible for 80G deduction:

i) 100% deduction on donation to

1. Prime Minister’s National Relief Fund

2. National Defence Fund

3. Prime Minister’s Armenia Earthquake Relief Fund 176

4. The Africa (Public Contribution – India) Fund

5. The National Foundation for Communal Harmony

6. Approved university or educational institution of national eminence

7. The Chief Minister’s Earthquake Relief Fund, Maharashtra

8. Donations made to Zila Saksharta Samitis.

9. The National Blood Transfusion Council or a State Blood Transfusion Council.

10. The Army Central Welfare Fund or the Indian Naval Benevolent Fund or The Air Force Central Welfare Fund

11.  National Children’s Fund

ii) 50% deduction on donation to

1. Jawaharlal Nehru Memorial Fund

2. Prime Minister’s Drought Relief Fund

3. Indira Gandhi Memorial Trust

4. The Rajiv Gandhi Foundation

iii) 100% deduction subject to qualifying limit on donation to

The government or a local authority for promoting family planning.

iv) 50% deduction subject to qualifying limit on donation to

1. The government or any local authority for any charitable purposes other than for promoting family planning.

2. Any authority in India that is engaged in housing development, development of cities, towns and villages

3. Corporations promoting interests of Muslim, Christian, Sikh, Buddhist, Parsi communities.

4. Repair work of a notified temple, mosque, church, gurudwara, etc.

Related Cases:

Deduction—S. 80G of the Income-tax Act, 1961. BHAGAT DHARAM CHAND PREM SAGAR CHARITABLE TRUST vs. CIT

S. 80G of the IT Act, 1961—Deduction—The application of assessee seeking renewal of approval granted to it u/d 80G(5) was rejected by Commissioner without considering the law laid down by Supreme Court in various cases. Therefore, in such situation. Commissioner should examine the question de novo keeping in view the law laid down by Supreme Court in various cases and then decide the application of the assessee. Thus, for such purpose, the matter is remanded back to the Commissioner for fresh consideration—Kumar Gandharva Sangeet Academy vs. CIT

S. 12A, 80G of  IT Act, 1961—Deduction—The assessee-trust is established for carrying out medical and educational charitable activities constructed a building by borrowing funds and let out the building to another educational institution to carry out its educational activities. The assessee was granted registration as well as recognition u/s 12A and 80G respectively and it sought renewal of recognition u/s 80G of the Act. Since the nature of activities carried on by the assessee is construction of building and letting of these out on rent and the relationship is that of a land lord and tenant and the rental income is earned by the assessee not as a part of its charitable activitiy but in the status of landlord, therefore, the application for renewal of recognition u/s 80G deserves  to be rejected—D. R. Ranka Charitable Trust vs. DIT (2010) 3 ITR (Trib) 151 (ITAT-Banglore)

S. 80G of IT Act, 1961—Deduction—Condition No. (ii) of sub-s.(5) of S. 80G, read with Explanation 3, makes it clear that the Commissioner can refuse to grant recognition u/s 80G only in the event of finding that the claimed charitable purpose includes any purpose, the whole or substantially the whole of which is of a religious nature. Hence, if in earlier years assessee activity was continuously treated to be solely charitable activity and benefit of S. 80G was extended to it and now if the Commissioner is taking a different view in current year, it is necessary for him to elaborately discuss material which form basis for taking different view from earlier years to deny benefit of S. 80G of the Act—Shri Digambar Jain Malwa Prantik Sabha Trust vs. CIT (2011)

S. 80G of IT Act, 1961—Deduction—The petitioner is a charitable organisation and it received donation from Jan. 26, 2001 to Sept. 30, 2001. It maintained separate accounts of income and expenditure for providing relief to the victims of earthquake in Gujrat. It spent entire amount to the victims of earthquake before Mar. 31, 2004 but it could not render the accounts of income and expenditure to the prescribed authority by June 30, 2004. Because of such failure, the entire donation was treated as taxable income of the petitioner. On receiving a questionnaire from the Assessing Officer, it submitted the details furnishing requisite particulars and also tried to file Form No. 10AA on Mar. 29, 2006 and Mar. 30, 2006 in the office of Director of Income-tax (exemption) with an application for condonation of delay but same was rejected. The condition regarding rendering of account before June 30, 2004 is directory not the mandatory and, therefore, the application for condonation of delay could not be rejected on the ground that there was no power to condone the delay. Hence rejection of application of condonation of delay is not valid—Church Auxiliary For Social Action vs. DGIT (2010) 325 ITR 362 (Delhi)

S. 2(15), 11, 13, 80G of IT Act, 1961—Deduction—S. 12(1) of the Act provides that voluntary contributions received by a trust created only for charitable or religious purposes are to be deemed as income u/s 11 of the Act and if some of the objects of the trust are charitable and some of the objects are not charitable, such a trust will not be covered u/s 12 of the Act. If the trust is found to be violating the provisions of S. 13 of the Act then the authority concerned is required to deny exemption u/s 11 of the Act—Subharam Trust vs. DIT (Exemption) (2009) 317 ITR 65 (ITAT-Banglore)

S. 80G of  IT Act, 1961—Renewal of Recognition—Making additions or adjustments or disallowances in the course  of an assessment u/s 143(3) is substantially different from examining the maintenance of regular books of account in its ordinary course of business. A case of disallowance per se does not make out a case of not maintaining the regular books of account. Therefore, denial of recognition of the charitable trust on the basis of certain disallowances made against the assessee in the course of assessment u/s 143(3) of the Act is not justified—N U Trust vs. DIT (Exemption) (2010) 3 ITR (Trib) 290 (ITAT-Banglore)

S. 80G of IT Act, 1961—Deduction—The provisions contained in S. 80G5(iii) makes it clear that the approval can be granted only if the institution is formed wholly for charitable purpose and none of its object is of religious nature. However, S. 80G(5B) grants some concession in this matter, that approval can be granted if not more than 5 per cent of the total income of a clear is applied towards religious purpose. The assessee which is a university incorporated under the Haryana Private University Act, 2006, filed an application in Form No. 10A for approval u/s 80G(5)(vi). Since the rules governing assessee-university contained a provision for transfer of its assets to governing body, whoes objects included a manifestly religious object, which are against the provisions of S. 80G(5)(ii) and thus, its claim u/s 80G(5)(vi) deserves to be rejected—O.P. Jindal Global University vs. CIT (2010) 127 ITD 164 (ITAT-Delhi)

S. 80G of IT Act, 1961—Deduction—The assessee-trust was granted registration u/s 12A as well as exemption u/s 80G of the Act. On an application for renewing the exemption u/s 80G, the Commissioner relied on the figures reflected in the balance-sheet without going beyond those figures and without appreciating the evidence and history of the assessee-trust came to a finding that the assessee violated the provisions of S. 11 of the Act, whereas the assessee had proved beyond doubt that the donation represented corpus donation to the assessee-trust. Hence, the finding of the Commission is vitiated and order of refusal of renewal the exemption u/s 80G is not sustainable—Satchidananda Charitable Medical Trust vs. CIT (2009) 319 ITR 46 (ITAT-Cochin)

Deduction—S. 80G, 80P—IT ACT, 1961—COMMISSIONER OF INCOME-TAX vs. HARYANA STATE CO-OPERATIVE SUPPLY AND MARKETING FEDERATION LIMITED [2012] 344 ITR 631 (P&H)

S. 80G(5), 80G(5B) & 80G, Expln. 3; of IT Act, 1961—Deduction—The assessee, a charitable institute was established for both charitable and religious purpose and its expenditure towards religious activities exceed the expenditures towards the charitable activities undertaken by the assessee institution. As such it is hit by the Expln. 3 to S. 80G so as to disqualify it from obtaining a certificate of recognition u/s 80G(5)(vi) of the Act. Even if any one of the objects of the public trust/institution is found to be of religious in nature, it stands disqualified for obtaining exemption u/s 80G of the Act—Church of Christ Social Service Society vs. CIT (2012) 144 TTJ 785 (ITAT-Visakha)

S. 80G of IT Act, 1961—Deductions—Since the assessee-trust was registered u/s 12A as well as under s. 10(23C), there cannot be any dispute that the trust was established for charitable purpose. Thus, Commissioner is required to find out the real purpose, as distinguished from the ostensible purpose of establishment of the trust and he cannot deny the registration solely on the basis of one clause, which cannot be acted upon in view of the restriction contained in other clauses. The mandate of S. 80G is also very clear that there should be a provision for the transfer or application of income or assets of the institution for the purposes other than charitable purpose. The said provisions should be capable of acted upon the management, then only the registration can be denied in view of S. 80G(5)(ii) of the Act—NSHM Academy vs. CIT (2012) 134 ITD 304 (ITAT-Kolkata)

S. 2(15), 80G IT Act, 1961—Deduction—The assessee is providing free professional training of sewing, weaving and music to the poor, widows and helpless uneducated females to make them self-dependent against nominal payments and further, these activities are carried on with the help of donations received from members and from persons contributing for charity. When the registration granted to the assessee u/s 12A was in force and had not been withdrawn, there is no justification to reject the application of the assessee for grant of renewal of registration u/s 80G of the Act on the ground that the object of the assessee does not fall within the purview of the definition of charitable activity u/s 2(15) of the Act—Gian Educational Society vs. CIT (2010) 6 ITR (Trib) 350 (ITAT-Delhi)

S. 12AA, 80G of IT Act, 1961—Charitable purpose—While considering the application of the assessee trust for grant of registration u/s 12AA and S. 80G of the Act, the Commissioner of Income-tax has to satisfy himself about the genuineness of the activities of the trust in accordance with the norms specified u/s 12AA of the Act and not about the credentials, capacity, qualification etc.—Prayer For India vs. ITO (2011) 7 ITR (Trib) 201 (ITAT-Chennai)

S. 80G of IT Act, 1961—Deduction—Donation—Where an institution or fund which incurrs expenditure in the relevant year which is of religious nature for an amount not exceeding 5% of its total income in that previous year then for that previous year, the institution or fund shall be deemed exempted u/s 80G by deeming it.

S. 80G of IT Act, 1961—Deduction—Assessee filed an application in Form No. 10G seeking approval u/s 80G of the Act on the ground that it is a trust established for the purpose of propagating Sufism. Sufism is a part of Islam. Probably, it is wing propagating Islam religion and merely, because the documents of such trust contain the aspect of culture, social and non political or organization, it would not come under the category of “Charitable Institution. Hence, assessee-trust is not eligible for the benefit u/s 80G of the Act—International Sufi Centre vs. DIT (2011) 200 Taxman 323 (Ker)

S. 80G, r/w S. 12A of IT Act, 1961—Deduction—The assessee trust was registered as a charitable institution u/s 12A and also been granted exemption u/s 80G of the Act. Latter on objects of the assessee-trust were amended but earlier objects were still in existence. Therefore, rejection of his application for renewal of exemption u/s 80G is not justified and the assessee-trust is allowed to continue to be eligible for registration u/s 12A of the Act—Mehta Jivraj Makandas & Parekh Govindaji Kalyanji Modh Vanik Vidyarthi Public Trust vs. DIT (2011) 131 ITD 462 (ITAT-Mum.)

S. 80G of the IT Act, 1961, r/w Rule 11AA of IT Rules 1962—Deductions—Assessee, a society is registered under Societies Registration Act, 1860. Since the conditions laid down in rule 11 of Rules 1962 have been complied with, the application of assessee filed u/s 80G(5)(vi) cannot be rejected mere on account that assessee is charging fees and having some surplus—CIT vs. Gaur Brahmin Vidya Pracharini Sabha (2011) 203 Taxman 226 (P&H)

S. 80G IT Act, 1961—Deduction—Income tax Department cannot reject the renewal of the trust as charitable trust u/s 80G of the Act merely because the particular expenditure is for an activity which may be termed as spending for a particular religion—Unmade Charitable Trust vs. U.O.I.

S. 80G of the IT Act, 1961—Donation to Charitable Turst—The remission of 50 per cent of stamp duty is to be given on satisfying two conditions, firstly, the gift or settlement should be one for charitable or religious purpose, and secondly, the donee, society or trust should have been approved u/s 80G of the IT Act, 1961—Manidhaneyam Charitable Trust vs. Govt. of T.N.

S. 37, 80G of the IT Act, 1961—Business expenditure—If there is no direct nexus between donation and profession and conditions are not satified under s./s 80G the claim u/s 37 of the Act not allowable—A.M. Mathur vs. DCIT

S. 132(9A) & 132B of IT Act, 1961—Search and seizure—The books of account or other document or any money etc., seized under sub.s.-(1) of S. 132 shall be handed over by the authorized officer to the Assessing Officer having jurisdiction within a period of 60 days and thereafter the powers shall be exercised by such Assessing Officer—P. Murugesan vs. Director IT (2009) 222 CTR 619 (Mad)

S. 80G of IT Act, 1961—Deduction—Mere contribution for the purpose of construction of one room in hostel may not by itself be treated to be an act violating the requirement of S. 80G(5B) of the Act. Therefore, application moved for renewal of exemption is restored for reconsideration of CIT in accordance with law—Shri Sardarmal Sancheti Charitable Trust vs. U.O.I. (2009) 222 CTR 617 (Raj)

S. 80G of the IT Act, 1961—Deductions—Since the matter seeking direction to revenue to grant approval u/s 80G for making certain donations to certain funds of, charitable institution which is sub judice before the Appellate Tribunal High Court cannot reach to final conclusion except issuing direction for early disposal of appeal pending before Appellate Tribunal—Kalinga Foundation Trust vs. CIT

S. 80-IA, 80G, 132, 158BD of IT Act, 1961—Since the statements recorded u/s 132(4) of third party are not provided/furnished to the assessee on which the Assessing Officer has relied for the purpose of assessment, such assessment order is bad in law and deserves to be set aside—Hamish Engineering Industries Pvt. Ltd. vs. DCIT (2009) 314 ITR 286 (ITAT-Mumbai)

S. 12A, 12AA, 80G of IT Act, 1961—Charitable Purpose—Assessee engaged in charitable and medical relief activities. The assessee filed an application u/s 12A of the Act seeking registration of the trust which was recommended by the Assessing Officer as well as Additional Commissioner considering the charitable activities of the assessee. The assessee applied under s. 80G of the Act seeking recognitions of the society but the Commissioner without considering the material factors denied the registration u/s 12A and recognition u/s 80G of the Act. Hence, the action of the Commissioner not justified and matter remanded to Commissioner to grant registration and considering the issue of recognition u/s 80G afresh—Baijnath Charitable and Educational Trust vs. CIT (2009) 317 ITR 380 (ITAT-Lucknow)

S. 37, 80G of IT Act, 1961—Business expenditure—The assessee is engaged in distributing electricity in Surat. An expenditure made by a business man by way of commercial expediency must be an expenditure which has been incurred in the expectation that such payment should directly or indirectly benefit the business of the assessee or facilitate the carrying on the assessee’s business and such expenditures are allowable u/s 37(1) of the Act—Surat Electricity Co. Ltd. vs. ACIT (2010) 5 ITR (Trib) 280 (ITAT-Ahd.)

S. 80G of IT Act, 1961—Deduction—Mere contribution for the purpose of construction of one room in hostel may not by itself be treated to be an act violating the requirement of S. 80G(5B) of the Act. Therefore, application moved for renewal of exemption is restored for reconsideration of CIT in accordance with law—Shri Sardarmal Sancheti Charitable Trust vs. U.O.I. [2010] 322 ITR 167 (Raj.)

S. 2(15), 11, 12A, 80G of IT Act, 1961—Charitable society—The assessee trust was granted registration u/s 12A of the Act and filed its return of income and claimed exemption of its income every year u/s 11 of the Act. There is nothing on record to suggest that the assets and income of the trust were available for the personal benefit of the trustee and the board members. These were only used for micro credit to poor women for their poverty alleviation and for the benefit of the socio-economically weaker sections of the society. Since the Assessing Officer has not substantiated his findings that the work of the trust is not charitable and the interest charged by the assessee was exorbitant, the assessee-trust cannot be denied for exemption u/s 11 of the Act—Asstt. Director of IT vs. Bharatha Swamukti Samsthe (2009) 319 ITR 422 (ITAT-Banglore)

S. 80G, Expln. 5 of IT Act, 1961—Deduction—No deduction in view of expln. 5 to S. 80G of the Act is allowable in respect of grass fodder made by assessee on the direction of the State Government—Surat Electricity Co. Ltd. vs. ACIT. [2010] 128 TTJ 696 (AHD)

S. 80G of IT Act, 1961—Deductions—The assessee trust was created wholly for a particular purpose and religious community i.e. Hindu and not for charitable purposes and thus, it contravenes the conditions laid down in S. 80G(5)(iii) read with Explanation 3 and, therefore, assessee trust not entitled to renewal of approval u/s 80G(5) of the Act.— Ramanujam Spiritual Public Charitable Trust vs. CIT  [2012] 138 ITD 81 (ITAT-Amritsar)(TM)

Deduction—S. 80G—IT ACT, 1961— Vishav Namdhari Sangat vs. Commissioner of Income-tax. [2012] 137 ITD 74 (ITAT-CHANDIGARH)

Deduction—S. 80G—IT ACT, 1961—Bhole Bhandari Charitable Trust vs. Commissioner of Income-tax. [2012] 137 ITD 55 (ITAT-CHANDIGARH)

S. 80G—Deduction—IT ACT, 1961—KARUNYA RURAL HEALTH CARE SOCIETY vs. DIT. [2012] 209 TAXMAN 230 (KARNATAKA)

S. 80G of IT Act, 1961, r/w 11AA of IT Rules, 1962—Deduction—In the present case, the approval u/s 80G was denied by the competent authority only for the reason that the objects clause provided that the activities of the trust will not be confined to India. The record shows that the assessee has already made amendment to the objects clause and after the amendment the said clause reads as; the activities of the trust will be confined only India; Being so, as on date, there cannot be any objection to grant approval u/s 80G(5) to the assessee. Hence, the competent authority was directed to consider and decide the assessee’s application u/s 80G(5) for grant of approval afresh—Heal-a-Child Foundation vs. DIT (2012) 135 ITD 315 (ITAT-Hyd.)

S. 80G, Income-tax Act, 1961—Deductions—Sonepat Hindu Educational vs. CIT

Reference: 

As Per Section 80G, of the Income Tax Act, 1961-

Deduction in respect of donations to certain funds, charitable institutions, etc.

(1) In computing the total income of an assessee, there shall be deducted, in accordance with and subject to the provisions of this section,—

(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 [sub-clause (i) or in] [sub-clause (iiia) [or in sub-clause (iiiaa) [or in sub-clause (iiiab)] [or in sub-clause (iiib)] [or in sub-clause (iiie)] [or in sub-clause (iiif)] [or in sub-clause (iiig)] [or in sub-clause (iiiga)] or [sub-clause (iiih) or] [sub-clause (iiiha) or sub-clause (iiihb) or sub-clause (iiihc) [or sub-clause (iiihd)] [or sub-clause (iiihe)] [or sub-clause (iiihf)] [or sub-clause (iiihg) or sub-clause (iiihh)] [or sub-clause (iiihi)] [or sub-clause (iiihj)] or] in] sub-clause (vii) of clause (a) [or in clause (c)][or in clause (d)]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

(iiia)  the Prime Minister’s National Relief Fund; or

(iiiaa)  the Prime Minister’s Armenia Earthquake Relief Fund; or

(iiiab)  the Africa (Public Contributions – India) Fund; or

(iiib)  the National Children’s Fund; or

(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]

(iiid)  the Rajiv Gandhi Foundation, the deed of declaration in respect whereof was registered at New Delhi on the 21st day of June, 1991; or

(iiie)  the National Foundation for Communal Harmony; or

(iiif)  a University or any educational institution of national eminence as may be approved by the prescribed authority in this behalf; or

(iiig)  the Maharashtra Chief Minister’s Relief Fund during the period beginning on the 1st day of October, 1993 and ending on the 6th day of October, 1993 or to the Chief Minister’s Earthquake Relief Fund, Maharashtra; or

(iiiga)  any fund set up by the State Government of Gujarat exclusively for providing relief to the victims of earthquake in Gujarat; or

(iiih)  any Zila Saksharta Samiti constituted in any district under the chairmanship of the Collector of that district for the purposes of improvement of primary education in villages and towns in such district and for literacy and post-literacy activities.

Explanation.—For the purposes of this sub-clause, “town” means a town which has a population not exceeding one lakh according to the last preceding census of which the relevant figures have been published before the first day of the previous year ; or]

(iiiha) the National Blood Transfusion Council or to any State Blood Transfusion Council which has its sole object the control, supervision, regulation or encouragement in India of the services related to operation and requirements of blood banks.

Explanation.—For the purposes of this sub-clause,—

(a) “National Blood Transfusion Council” means a society registered under the Societies Registration Act, 1860 (21 of 1860) and has an officer not below the rank of an Additional Secretary to the Government of India dealing with the AIDS Control Project as its Chairman, by whatever name called;

(b) “State Blood Transfusion Council” means a society registered, in consultation with the National Blood Transfusion Council, under the Societies Registration Act, 1860 (21 of 1860) or under any law corresponding to that Act in force in any part of India and has Secretary to the Government of that State dealing with the Department of Health, as its Chairman, by whatever name called; or

(iiihb)  any fund set up by a State Government to provide medical relief to the poor; or

(iiihc)  the Army Central Welfare Fund or the Indian Naval Benevolent Fund or the Air Force Central Welfare Fund established by the armed forces of the Union for the welfare of the past and present members of such forces or their dependants; or

(iiihd)  the Andhra Pradesh Chief Minister’s Cyclone Relief Fund, 1996; or

(iiihe)  the National Illness Assistance Fund; or

(iiihf)  the Chief Minister’s Relief Fund or the Lieutenant Governor’s Relief Fund in respect of any State or Union territory, as the case may be :

Provided that such Fund is—

(a)  the only Fund of its kind established in the State or the Union territory, as the case may be;

(b)  under the overall control of the Chief Secretary or the Department of Finance of the State or the Union territory, as the case may be;

(c)  administered in such manner as may be specified by the State Government or the Lieutenant Governor, as the case may be; or]

(iiihg)  the National Sports Fund to be set up by the Central Government; or

(iiihh)  the National Cultural Fund set up by the Central Government; or

(iiihi)  the Fund for Technology Development and Application set up by the Central Government; or

(iiihj)  the National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities constituted under sub-section (1) of section 3 of the National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities Act, 1999 (44 of 1999); 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 [other than the purpose of promoting family planning; or]

(vi)  an authority constituted in India by or under any law enacted either for the purpose of dealing with and satisfying the need for housing accommodation or for the purpose of planning, development or improvement of cities, towns and villages, or for both;

(via)  any corporation referred to in clause (26BB) of section 10; or

(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;

(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;

(c) any sums paid by the assessee, being a company, in the previous year as donations to the Indian Olympic Association or to any other association or institution [established in India, as the Central Government may, having regard to the prescribed guidelines, by notification in the Official Gazette, specify in this behalf] for—

(i)  the development of infrastructure for sports and games; or

(ii)  the sponsorship of sports and games,

in India;

(d) any sums paid by the assessee, during the period beginning on the 26th day of January, 2001 and ending on the 30th day of September, 2001, to any trust, institution or fund to which this section applies for providing relief to the victims of earthquake in Gujarat.

(3) [Omitted by the Finance Act, 1994, w.e.f. 1-4-1994.]

(4) Where the aggregate of the sums referred to in sub-clauses (iv), (v), (vi) [, (via)] and (vii) of clause (a) and in [clauses (b) and (c)] 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 fulfills 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 and12 [or clause (23AA)] [or clause (23C)] of section 10 :

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 of 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;]]

(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;

(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 part of India or under section 25of 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, or is an institution financed wholly or in part by the Government or a local authority;

(vi) in relation to donations made after the 31st day of March, 1992, the institution or fund is for the time being approved by the Commissioner in accordance with the rulesmade in this behalf

(vii) where any institution or fund had been approved under clause (vi) for the previous year beginning on the 1st day of April, 2007 and ending on the 31st day of March, 2008, such institution or fund shall, for the purposes of this section and notwithstanding anything contained in the proviso to clause (15) of section 2, be deemed to have been,—

(a)  established for charitable purposes for the previous year beginning on the 1st day of April, 2008 and ending on the 31st day of March, 2009; and

(b)  approved under the said clause (vi) for the previous year beginning on the 1st day of April, 2008 and ending on the 31st day of March, 2009.

(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.

(5B) Notwithstanding anything contained in clause (ii) of sub-section (5) and Explanation 3, an institution or fund which incurs expenditure, during any previous year, which is of a religious nature for an amount not exceeding five per cent of its total income in that previous year shall be deemed to be an institution or fund to which the provisions of this section apply.]

(5C) This [section] applies in relation to amounts referred to in clause (d) of sub-section (2) only if the trust or institution or fund is established in India for a charitable purpose and it fulfills the following conditions, namely :—

(i)  it is approved in terms of clause (vi) of sub-section (5);

(ii) it maintains separate accounts of income and expenditure for providing relief to the victims of earthquake in Gujarat;

(iii) the donations made to the trust or institution or fund are applied only for providing relief to the earthquake victims of Gujarat on or before the 31st day of March, 1[2004];

 (iv)  the amount of donation remaining unutilized on the 31st day of March, [2004] is transferred to the Prime Minister’s National Relief Fund on or before the 31st day of March, [2004];

(v) it renders accounts of income and expenditure to such authorityand in such manner as may be prescribed, on or before the 30th day of June,[2004].

(5D) No deduction shall be allowed under this section in respect of donation of any sum exceeding ten thousand rupees unless such sum is paid by any mode other than cash.]

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).

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, [section 12 or section 12A];

(ii) that, under clause (c) of sub-section (1) of section 13, the exemption under section 11 [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.

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.

Explanation 4.—For the purposes of this section, an association or institution having as its object the control, supervision, regulation or encouragement in India of such games or sports as the Central Government may, by notification in the Official Gazette, specify in this behalf, shall be deemed to be an institution established in India for a charitable purpose.

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.

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