Apply the qualifying limit before the deduction percentage
For tax year 2026-27, section 133 of the Income-tax Act, 2025 separates eligible monetary donations into different percentage and qualifying-limit groups. A 50% donation subject to the income ceiling is not calculated by simply halving every receipt. First restrict the relevant qualifying donation amount to the applicable 10% adjusted gross total income limit, then apply its deduction percentage. Other named donations sit outside that particular ceiling.
This donor-calculation guide was checked on 22 October 2026 using the Act consolidated with Finance Act 2026 and the Department’s current section 133 text. It addresses tax year 2026-27, not an older return’s section 80G working. The examples assume an individual validly outside the section 202 default new regime, which does not permit this deduction, and sufficient income eligible for the stated deduction. They do not compute final tax, rebate, surcharge or cess.
Classify the actual recipient and purpose
Section 133(1)(a) provides full deduction for the listed categories, while subsection (1)(b) provides 50%. Subsection (2) places the specified family-planning and company sports categories and subsection (1)(b)(ii)–(vi) within a common qualifying-income ceiling. The following table summarises the specific categories used below; it is not an exhaustive list of every eligible fund.
| Illustrative category | Deduction percentage | Section 133(2) ceiling |
|---|---|---|
| Prime Minister’s National Relief Fund, subsection (1)(a)(ii) | 100% | Outside this 10% ceiling |
| Prime Minister’s Drought Relief Fund, subsection (1)(b)(i) | 50% | Outside this 10% ceiling |
| Qualifying approved charitable institution, subsection (1)(b)(ii) | 50% | Within the shared 10% ceiling |
| Qualifying family-planning donation, subsection (1)(a)(xxiii) | 100% | Within the shared 10% ceiling |
Do not classify a private charity as a government relief fund merely because the appeal uses a similar name. Check the legal recipient, approval where required, purpose, payment and relevant period. For subsection (1)(b)(ii), the current text connects the claim to the institution’s furnished donation information and verification; a receipt alone does not displace that requirement. This article does not prescribe an unverified new form number or transpose an older recipient-filing deadline into the new tax year.
Build adjusted gross total income from the tax computation
Subsection (7)(a) defines the adjusted base by reducing gross total income for the specified non-taxable portion and entitlement under other provisions of Chapter VIII. Do not deduct section 133 itself and create a circular base. Use the completed tax computation, not turnover, gross bank credits or annual cost to company. Where special-rate income or other statutory restrictions are present, examine those provisions too; the examples deliberately use ordinary eligible income without such complications.
Separate uncapped donations from the qualifying-limit pool. A donation outside subsection (2) should not consume its capacity merely because all receipts sit in one ledger. Equally, several capped receipts cannot each obtain an independent 10% allowance. Retain the percentage group and ceiling group as separate spreadsheet columns. Where a capped pool contains both deduction rates, document the complete category allocation rather than applying one blended rate without support.
Exclude ineligible payments before computing relief
Subsection (4) requires a donation of money. Donated inventory, furniture or other goods should not enter this deduction merely at their purchase cost or asserted fair value. Under subsection (5), a donation over ₹2,000 needs a non-cash payment mode: for a single ₹10,000 cash donation, do not claim the first ₹2,000 as though the rule only disallowed the excess. Artificial splitting is not a substitute for establishing the actual payment.
The same allowed donation cannot also be deducted elsewhere under subsection (3). Reconcile business expense accounts and personal donation schedules to prevent duplicate relief. Corporate CSR and company-specific regimes introduce separate questions outside these individual examples. A charitable purpose and commercial goodwill do not by themselves establish that every payment has the same tax treatment.
Retain a donor-side evidence bridge
For every claim, preserve payment date, bank reference, recipient identity, exact statutory category, approval evidence where required and reconciliation to information furnished by the recipient. Flag incorrect identity or amount reporting for correction with the recipient rather than editing a certificate privately. Reconcile total cash and non-cash giving, excluded items, qualifying donation base and final deduction to the return. A calculation can be mathematically correct while its recipient classification remains unsupported.
Worked illustrations
These illustrations use fictional facts and expressly stated assumptions. Amounts are Indian rupees unless a different currency or unit is specified. They are independent examples, not findings about any actual client.
Illustrative example 1: 100% outside the qualifying-income ceiling
Assume a qualifying non-cash ₹40,000 donation to the Prime Minister’s National Relief Fund under section 133(1)(a)(ii), with ₹2,00,000 adjusted gross total income and no other restriction. The deduction is ₹40,000. Although 10% of that income is ₹20,000, subsection (2) does not place this named fund in its qualifying-limit pool.
Illustrative example 2: 50% without that income ceiling
Assume a qualifying non-cash ₹20,000 donation to the Prime Minister’s Drought Relief Fund under subsection (1)(b)(i). The deduction is 50% × ₹20,000 = ₹10,000, subject to the stated general assumptions. Do not confuse the Drought Relief Fund with the National Relief Fund and apply the wrong percentage.
Illustrative example 3: derive the base before restricting a charity donation
Assume gross total income ₹12,00,000, entitlement to other Chapter VIII deductions ₹2,00,000 and no other adjustment or special-rate complication. Adjusted gross total income is ₹10,00,000. Its 10% ceiling is ₹1,00,000. A qualifying non-cash donation of ₹1,50,000 to an approved subsection (1)(b)(ii) institution produces a deduction of 50% × ₹1,00,000 = ₹50,000, not ₹75,000.
Illustrative example 4: 100% does not always mean unlimited
Assume a qualifying non-cash family-planning donation of ₹1,20,000 to the Government under subsection (1)(a)(xxiii), with adjusted gross total income ₹8,00,000. The qualifying ceiling is ₹80,000, so the deduction is 100% × ₹80,000 = ₹80,000. The recipient and purpose must genuinely satisfy that clause.
Illustrative example 5: keep uncapped and capped receipts apart
Assume adjusted gross total income ₹4,00,000, a qualifying ₹20,000 non-cash National Relief Fund donation and ₹50,000 non-cash to a qualifying approved charitable institution. The capped charity base is min(₹50,000, ₹40,000) = ₹40,000, yielding ₹20,000 deduction. The separate full deduction is ₹20,000. Total deduction is ₹40,000; the relief-fund receipt does not use the charity pool’s ₹40,000 capacity.
Illustrative example 6: cash and goods are not partially eligible money donations
Assume adjusted gross total income ₹3,00,000 and three independent gifts to a qualifying 50%-capped institution: a single ₹10,000 cash donation, goods costing ₹50,000, and ₹20,000 by bank transfer. The first two contribute zero to this deduction. The bank transfer is within the ₹30,000 qualifying ceiling and yields ₹10,000 deduction. Total value given is ₹80,000, but the section 133 deduction here is ₹10,000.
Ten-step verification table
| Step | Verification | Evidence to retain |
|---|---|---|
| 1 | Confirm the governing tax year. | Computation header and applicable Act. |
| 2 | Establish regime eligibility. | Valid option and complete regime computation. |
| 3 | Identify the exact legal recipient and purpose. | Receipt, approval and recipient details. |
| 4 | Classify the statutory deduction percentage. | Section 133 clause mapping. |
| 5 | Identify whether the common ceiling applies. | Separate capped and uncapped schedules. |
| 6 | Exclude in-kind and disallowed cash donations. | Payment-mode and asset-gift reconciliation. |
| 7 | Derive adjusted gross total income. | Other Chapter VIII deductions and adjustments. |
| 8 | Apply the qualifying limit before the percentage. | Formula with shared-pool reconciliation. |
| 9 | Match recipient-furnished information where required. | Reporting evidence and correction follow-up. |
| 10 | Remove duplicate claims and tie to the return. | Expense-ledger and final deduction bridge. |
Sixteen practitioner FAQs
1. Is section 80G the reference for all returns filed in 2026?
No. Use the law governing the income period; this guide addresses section 133 for tax year 2026-27.
2. Can an individual claim this under the section 202 default regime?
No. Section 133 is outside its permitted Chapter VIII exceptions.
3. Does every donation receive 100% deduction?
No. The statutory recipient category determines the percentage.
4. Does every donation face the 10% income ceiling?
No. Subsection (2) specifies which categories enter that pool.
5. Is the ceiling 10% of turnover?
No. It uses adjusted gross total income under the statutory definition.
6. Should this donation deduction reduce its own adjusted base?
No. Do not create a circular calculation by deducting section 133 itself.
7. Do several capped charities get separate ceilings?
No. Aggregate the relevant capped sums.
8. Is a 50%-capped donation halved before the qualifying ceiling?
Restrict the qualifying donation base first, then apply its percentage.
9. Are the two Prime Minister funds in the examples interchangeable?
No. The National Relief and Drought Relief funds are different statutory categories.
10. Does the first ₹2,000 of a single ₹10,000 cash donation qualify?
No. A donation over ₹2,000 requires non-cash payment for this deduction.
11. Can donated goods be valued and claimed here?
No. Section 133(4) requires a sum of money.
12. Does a bank transfer prove the recipient is approved?
No. Payment mode and recipient eligibility are separate tests.
13. Is a receipt alone decisive for the approved-institution claim?
No. Subsection (6) also addresses the institution’s furnished information and verification.
14. Can the same allowed sum be deducted again as another claim?
No. Subsection (3) prevents duplicate deduction under other provisions.
15. Do these examples resolve corporate CSR deductibility?
No. They isolate individual donor calculations with the stated assumptions.
16. What if the computation includes special-rate capital gains?
Examine the relevant income provisions and deduction restrictions before finalising the adjusted base or available relief.
Working-paper organisation
Keep the source documents, calculation and final conclusion together for the same entity and period. If using assureTax or other assureOffice tools, use only confirmed available functions and retain this evidence with the output.
Conclusion
Keep eligibility, qualifying amount and deduction percentage as three separate conclusions. A donor worksheet should explain every excluded rupee and reproduce the return claim from recipient evidence and the adjusted-income base.