Imagine you've made a monetary donation to a charitable institution. You're aware that you can claim a deduction under Section 80G of the Income Tax Act, but you're not quite sure how it works.

Here's what you need to know:

You deduct 80G deduction is from your Gross Total Income (GTI). Your GTI includes all sources of income, such as salary, dividend income, capital gains, interest income, rental income, etc. You subtract the deduction under Section 80G from GTI to determine your net taxable income.

The amount you can claim as a deduction depends on the institution you've donated to.

It can range from 50% to 100% of the amount you donated. However, you can't claim 80G deduction more than your GTI. That is: If your GTI is zero or negative, you won't be able to claim the deduction.

Disclosure in ITR:

To claim a deduction under section 80G, you must provide the details of your donations in 'Schedule 80G' in the ITR form. This schedule consists of four tables, each corresponding to a different category of institution. You'll need to provide details of your donations, including the name and address of the donee, PAN of the donee, total amount of the donation, and the eligible amount of the donation.

To claim the deduction, the donation must be in the form of money.

Donations made in kind, such as goods or services, are not eligible. Also, donations made in cash exceeding Rs. 2,000 will not be eligible for the deduction under Section 80G.

You'll need to have the donation receipt and the donation certificate in Form 10BE to claim your deduction.

You can obtain Form 10BE from the institution that received your donation. This certificate serves as concrete evidence to support your claim for the deduction.

Remember, only taxpayers who opt for the old tax regime while filing ITR can claim this deduction. If you've opted for the new tax regime, you cannot claim any Section 80G deduction while filing your ITR.