Goods and Services Tax (GST) and Corporate Tax Planning · Corporate Tax Planning

Deductions for Donations to Funds and Charitable Institutions under Section 133

Updated 11 October 2026 · Fact-checked

Section 133 of the Income-tax Act, 2025 allows a deduction for donations to listed funds and institutions. Some donations qualify in full, others at 50%. Donations in the 10% group are capped at 10% of adjusted gross total income. The gift must be money, and payments above ₹2,000 must be non-cash.

Understand Deductions for Donations to Funds and Charitable Institutions

Section 133 is the 2025 Act's home for the deduction that older law students know as section 80G. It rewards you for giving money to certain public causes. The Act lists the eligible funds and institutions, and the list decides how much you can deduct.

The section has two tiers. Clause (1)(a) covers donations allowed in full (100%), such as the National Defence Fund, the PM CARES Fund, the National Children's Fund and the Clean Ganga Fund. Clause (1)(b) covers donations allowed at 50%, such as the Prime Minister's Drought Relief Fund, approved charitable funds and institutions, and government or local authority donations for charitable purposes.

Then comes the cap. Not every donation is free of limit. Under sub-section (2), the donations in clause (1)(a)(xxiii) and (xxiv) and clause (1)(b)(ii) to (vi) are added up. If that total exceeds 10% of adjusted gross total income, the excess is ignored. Donations in the other 100% items and in (1)(b)(i) are outside this cap.

There are also conditions. The donation must be a sum of money, not goods. A donation above ₹2,000 needs a non-cash mode. You cannot claim the same sum under any other provision. For donations to institutions under (1)(b)(ii), the claim is allowed only on the basis of information the institution furnishes to the prescribed authority, and it is subject to verification under the Board's risk management strategy.

For tax planning, the questions are: which clause does the donee fall in, is the 10% cap applicable, and has the payment met the conditions.

Key rules to remember

100% donations without cap: Deduction = whole of the sum paid to funds in section 133(1)(a)(i) to (xxii); Examples: National Defence Fund, PM CARES Fund, National Children's Fund. These are outside the 10% cap.
100% donations subject to cap: Sum paid to donees in section 133(1)(a)(xxiii) and (xxiv) goes into the capped aggregate; once retained after the cap, it is allowed at 100%; Family planning bodies, and the Indian Olympic Association or notified sports bodies (donor must be a company for clause (xxiv)). They fall within the cap in sub-section (2).
50% donations: Sum paid to donees in section 133(1)(b); once retained after any cap, it is allowed at 50%; Includes Prime Minister's Drought Relief Fund, approved charitable funds, government for charitable purposes. Only (ii) to (vi) fall within the cap. Clause (i) is outside it.
10% cap: Capped aggregate = sums paid under (1)(a)(xxiii), (xxiv) and (1)(b)(ii) to (vi). Cap = 10% × adjusted gross total income. Retained sums = capped aggregate if it is within the cap; otherwise the excess over the cap is ignored. Then apply 100% to retained (1)(a) sums and 50% to retained (1)(b) sums.; Sub-section (2) works on the sums paid, before the 50% is applied. The Act does not say which sums are ignored when the group mixes 100% and 50% items. State your allocation, for example pro rata: retained part of each sum = sum × cap ÷ capped aggregate. Follow the question if it directs otherwise.
Adjusted gross total income: Gross total income − income on which no tax is payable − deductions under other provisions of the Chapter; Defined in section 133(7)(a). Do not use gross total income directly.
Payment conditions: Money only; non-cash mode if donation > ₹2,000; Sub-sections (4) and (5). Cash up to ₹2,000 is acceptable.

How to solve Deductions for Donations to Funds and Charitable Institutions questions

Use this order for any donation question. It stops you mixing up the tiers and the cap.

1List each donation with the donee's name, amount, and mode of payment.
2Remove donations that fail the basic tests: not money, or above ₹2,000 paid in cash. These get no deduction.
3Place each remaining donee in clause (1)(a) at 100% or clause (1)(b) at 50%.
4Separate donees that fall within the 10% cap, namely (1)(a)(xxiii) and (xxiv) and (1)(b)(ii) to (vi), from those outside it.
5Compute adjusted gross total income: gross total income less income on which no tax is payable and less other deductions under the Chapter.
6Add the sums paid (not the 50% amounts) to the capped donees. Compare this aggregate with 10% of adjusted gross total income. If it is within the cap, retain all of it. If it exceeds the cap, ignore the excess as sub-section (2) directs. Then apply 100% to the retained (1)(a) sums and 50% to the retained (1)(b) sums. If the cap bites and the group mixes 100% and 50% items, state your allocation, for example pro rata.
7Add the uncapped 100% donations, the 50% of the Prime Minister's Drought Relief Fund sum, and the amounts from step 6. This is the deduction under section 133.
8Note that the same sum cannot be claimed under any other provision, and mention the institution's reporting and verification condition for (1)(b)(ii).

Quickest way: Three-bucket sorting

When to use it: Use it when a question lists many donations and you have limited time.

Bucket A: 100% donations outside the cap, that is (1)(a)(i) to (xxii). Add them in full.
Bucket B: the Prime Minister's Drought Relief Fund under (1)(b)(i). Take 50% of the sum paid. No cap applies.
Bucket C: the capped group. Add the sums paid under (1)(a)(xxiii), (xxiv) and (1)(b)(ii) to (vi), at 100% of the amount paid. If the total exceeds 10% of adjusted gross total income, ignore the excess. Then apply 100% to the retained (1)(a) sums and 50% to the retained (1)(b) sums. If the cap bites and the group mixes 100% and 50% items, state how you allocate the retained amount, for example pro rata.
Cross out any cash payment above ₹2,000 and any non-money gift before you start.
Total = Bucket A + Bucket B + Bucket C.

Common mistakes in Deductions for Donations to Funds and Charitable Institutions

Applying the 10% cap to every donation.
Students remember '10% of income' from the old section 80G and apply it to all.
Fix: Apply it only to the groups named in sub-section (2). The National Defence Fund and similar items in (1)(a)(i) to (xxii) are uncapped.
Using gross total income instead of adjusted gross total income.
The two terms look alike.
Fix: Reduce gross total income by income on which no tax is payable and by deductions under other provisions of the Chapter, as in section 133(7)(a).
Allowing cash donations of any size.
Students forget the payment-mode rule.
Fix: Cash is acceptable only up to ₹2,000. Above that, require a non-cash mode.
Allowing a deduction for donations in kind.
Students treat any gift to charity as qualifying.
Fix: Sub-section (4) allows the deduction only for a sum of money.
Giving 100% to a charitable trust or religious cause.
Students assume all charity gets full deduction.
Fix: Approved charitable institutions are in the 50% tier. A purpose wholly or substantially religious is not a 'charitable purpose', under section 133(7)(b).
Claiming the same donation again under another provision.
Students overlook sub-section (3).
Fix: Once allowed under section 133, the sum cannot qualify under any other provision in that or any other tax year.

Worked examples

Example 1

Meera Textiles Pvt Ltd has adjusted gross total income of ₹50,00,000 before any donation deduction. During the tax year it paid by bank transfer: ₹3,00,000 to the National Defence Fund, ₹2,00,000 to the Clean Ganga Fund (resident assessee; not CSR spend), and ₹4,00,000 to an approved registered charitable trust, the 50% category in section 133(1)(b)(ii). Compute the deduction.

Show the solution

The National Defence Fund and the Clean Ganga Fund are in section 133(1)(a), not in the capped group. Both are paid by bank, so the full ₹3,00,000 + ₹2,00,000 = ₹5,00,000 qualifies. Meera is a company, but the donor-status condition matters only for clause (xxiv), and no such donation is made here.
The charitable trust is under (1)(b)(ii), which is in the capped group. It is the only capped donation, so the capped aggregate is the sum paid: ₹4,00,000.
Sub-section (2) tests the sums paid, before the 50% is applied. 10% of adjusted gross total income = 10% × ₹50,00,000 = ₹5,00,000. The aggregate of ₹4,00,000 is within this limit, so nothing is ignored and no allocation question arises.
Apply the 50% rule to the retained sum: 50% × ₹4,00,000 = ₹2,00,000. The result would be the same even if the cap were tested on the 50% amount of ₹2,00,000, because that amount is also below ₹5,00,000.
Total deduction = ₹5,00,000 + ₹2,00,000 = ₹7,00,000.

Answer: The deduction under section 133 is ₹7,00,000, subject to the trust's reporting of the donation and verification.

Example 2

Rohan, an individual, has adjusted gross total income of ₹8,00,000. He gave ₹1,50,000 in cash to the Prime Minister's National Relief Fund, and ₹1,000 in cash to the National Children's Fund. He also gave ₹60,000 by cheque to an approved registered charitable trust (section 133(1)(b)(ii)). Compute the deduction.

Show the solution

The PM National Relief Fund is a 100% donee, but the payment of ₹1,50,000 was in cash. It is above ₹2,000, so no deduction is allowed under sub-section (5).
The National Children's Fund donation of ₹1,000 is in cash, but it is not above ₹2,000. It qualifies in full at 100%: ₹1,000.
The charitable trust sum is ₹60,000 by cheque. 10% of adjusted gross total income = ₹80,000. The sum paid is below the cap, so nothing is ignored.
50% of ₹60,000 = ₹30,000.
Total = ₹1,000 + ₹30,000 = ₹31,000.

Answer: The deduction is ₹31,000. The ₹1,50,000 cash donation is disallowed.

Exam tips

Write the clause number next to each donee. It shows the examiner you have placed it in the right tier.
State the cap rule in words before you compute: excess over 10% of adjusted gross total income is ignored for the groups in sub-section (2).
Scan every fact for cash payments, gifts in kind and CSR-funded donations to the Swachh Bharat Kosh or Clean Ganga Fund, which are excluded.
Add a line on conditions: institution reporting, verification under the risk management strategy, and no double claim. This is where theory marks come from.
If the question mentions the old section 80G, answer under section 133 for the 2025 Act and mention the link only briefly.

Practice questions from Corporate Tax Planning

Deductions for Donations to Funds and Charitable Institutions in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Deductions for Donations to Funds and Charitable Institutions: frequently asked questions

Which section of the Income-tax Act, 2025 replaces section 80G?

Section 133 deals with the deduction for donations to certain funds, charitable institutions and similar bodies. It is the corresponding provision to the older section 80G. Write your answers under section 133 for the June 2027 session.

Which donations get 100% deduction and which get 50%?

Clause (1)(a) lists the 100% donees, such as the National Defence Fund and PM CARES Fund. Clause (1)(b) lists the 50% donees, such as the Prime Minister's Drought Relief Fund and approved charitable institutions.

Is there a limit on the donation deduction?

Yes, for some donations. Sub-section (2) ignores the excess over 10% of adjusted gross total income for donations under (1)(a)(xxiii) and (xxiv) and (1)(b)(ii) to (vi). Other 100% donations are not covered by this cap.

Can I claim a deduction for a cash donation?

Only up to ₹2,000. A donation above ₹2,000 qualifies only if paid by a mode other than cash. The donation must also be a sum of money.

Do donations for religious purposes qualify?

A charitable purpose does not include a purpose that is wholly or substantially religious. The Act does allow the 50% deduction for renovation or repair of notified places of historic, archaeological or artistic importance or of renowned public worship.