Donation Deduction 2026-27: Rates, 10% Limit and Qualifying Institutions (Income Tax Act 2025)

Under the Income Tax Act 2025, a donation deduction is allowed under section 133. Some funds, such as the PM CARES Fund and the National Defence Fund, qualify for 100% of the amount paid. Approved charities and a few other recipients qualify for 50%. For several categories, the amount counted is capped at 10% of the adjusted gross total income. The donation must be a sum of money, and anything over Rs 2,000 must be paid by a mode other than cash.

This guide explains each rule with the sub-section next to it, two worked calculations for tax year 2026-27, and the mistakes that get claims rejected. It uses the Act as amended by the Finance Act, 2026 and the Income-tax Rules, 2026. It is general information, not tax advice. Last reviewed on 10 November 2026.

How much deduction do I get for a donation under the Income Tax Act 2025?

It depends on who received the money. Section 133(1) has two lists.

Section	Deduction	Subject to 10% cap?	Typical recipients
133(1)(a)(i) to (xxii)	Whole amount (100%)	No	National Defence Fund, PM CARES Fund, National Children's Fund, Swachh Bharat Kosh, Clean Ganga Fund and similar funds
133(1)(a)(xxiii), (xxiv)	Whole amount (100%)	Yes	Family planning promotion bodies; Indian Olympic Association and notified sports bodies (company donors only for (xxiv))
133(1)(b)(i)	50%	No	Prime Minister's Drought Relief Fund
133(1)(b)(ii) to (vi)	50%	Yes	Approved charitable funds and institutions, Government or local authority for charity, housing and urban development authorities, minority community corporations, notified places of worship (renovation or repair)

Which Act reference applies is the first thing to check on the receipt or certificate. A donation to a recipient that is on neither list gets no deduction under this section.

Which funds qualify for the 100% deduction?

Section 133(1)(a) lists these, among others:

• National Defence Fund; Prime Minister's National Relief Fund; PM CARES Fund
• Prime Minister's Armenia Earthquake Relief Fund; Africa (Public Contributions-India) Fund
• National Children's Fund; National Foundation for Communal Harmony
• A university or educational institution of national eminence approved by the prescribed authority
• National Blood Transfusion Council or a State Blood Transfusion Council; National Illness Assistance Fund; a State Government fund for medical relief to the poor
• Army Central Welfare Fund, Indian Naval Benevolent Fund, Air Force Central Welfare Fund
• Chief Minister's Relief Fund or Lieutenant Governor's Relief Fund, if it is the only such fund in the State or Union territory, is under the control of the Chief Secretary or Finance Department, and is administered as the State Government or Lieutenant Governor specifies
• National Sports Development Fund; National Cultural Fund; Fund for Technology Development and Application
• National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities; National Fund for Control of Drug Abuse
• Swachh Bharat Kosh and Clean Ganga Fund (the Clean Ganga Fund applies only where the donor is a resident)

For Swachh Bharat Kosh and Clean Ganga Fund, money a company spends as Corporate Social Responsibility under section 135(5) of the Companies Act, 2013 is excluded from this deduction (section 133(1)(a)(xx) and (xxi)).

For the educational institution in (vii), the prescribed authority is the Principal Chief Commissioner of Income-tax (Exemptions), who approves with the concurrence of the UGC Secretary (universities and non-technical institutions) or the AICTE Secretary (technical institutions) under rule 63.

Which donations get only 50%?

Section 133(1)(b) allows 50% of the sums paid to:

• the Prime Minister's Drought Relief Fund (no 10% cap);
• a fund or institution established in India for a charitable purpose that is either a registered non-profit organisation or an institution or fund in Schedule VII (Table: Sl. No. 1), and approved under section 354;
• the Government or a local authority, for any charitable purpose other than family planning;
• a housing, town-planning or urban development authority set up by law;
• a corporation set up by the Central or a State Government for the interests of a notified minority community;
• any entity, for renovation or repair of a temple, mosque, gurudwara, church or other place notified by the Central Government as of historic, archaeological or artistic importance, or a place of public worship of renown in a State or States.

"Charitable purpose" does not include a purpose that is wholly or substantially religious (section 133(7)(b)). The renovation and repair of a notified place of worship in (vi) is a specific exception written into the list.

How does the 10% limit work?

Section 133(2) applies to the sums in (1)(a)(xxiii), (1)(a)(xxiv) and (1)(b)(ii) to (vi). If their total exceeds 10% of adjusted gross total income, the excess is ignored. The 50% (where it applies) is then taken on the capped amount.

"Adjusted gross total income" is gross total income reduced by (a) any portion on which no income-tax is payable under any provision of the Act and (b) any amount for which you are entitled to a deduction under any other provision of the same Chapter (section 133(7)(a)).

Worked example 1: the 10% cap on an approved charity donation

Assumptions for tax year 2026-27: Ravi's gross total income is Rs 12,00,000. He has no income that is tax-free and no deduction under any other provision of the same Chapter, so adjusted gross total income is Rs 12,00,000. He pays Rs 1,50,000 by bank transfer to a charitable trust approved under section 354, which falls in section 133(1)(b)(ii).

Step	Working	Amount (Rs)
1. Adjusted gross total income	12,00,000 less nil	12,00,000
2. 10% limit	12,00,000 x 10%	1,20,000
3. Donation paid	Given	1,50,000
4. Amount counted	Lower of 1,50,000 and 1,20,000	1,20,000
5. Deduction at 50%	1,20,000 x 50%	60,000

Rs 30,000 of the donation is ignored under section 133(2), and the rest is allowed at 50%.

Worked example 2: a mix of 100% and 50% donations

Assumptions for tax year 2026-27: Meena's gross total income is Rs 8,00,000. She claims Rs 1,50,000 under another provision of the same Chapter, so adjusted gross total income is Rs 6,50,000. She donates by UPI: Rs 40,000 to the PM CARES Fund, Rs 50,000 to an approved charitable trust and Rs 20,000 to renovate a temple notified under section 133(1)(b)(vi).

Step	Working	Amount (Rs)
1. PM CARES Fund, 133(1)(a)(ii)	100%, no cap	40,000
2. Adjusted gross total income	8,00,000 less 1,50,000	6,50,000
3. 10% limit	6,50,000 x 10%	65,000
4. Capped-category donations	50,000 + 20,000	70,000
5. Amount counted	Lower of 70,000 and 65,000	65,000
6. Deduction at 50%	65,000 x 50%	32,500
7. Total deduction	40,000 + 32,500	72,500

The PM CARES donation sits outside the 10% test, so it does not use up the cap.

Real-life examples

Cash at the temple counter. Sunil gives Rs 5,000 in cash to an approved charity and gets a receipt. Under section 133(5), a donation over Rs 2,000 is allowed only if paid by a mode other than cash. The claim fails. A Rs 5,000 payment by cheque or UPI would have passed this test.

Donating goods. Kavita gives sarees and rice worth Rs 20,000 to a trust that is approved. Section 133(4) allows the deduction only for a donation made as a sum of money, so goods do not qualify, whatever their market value.

A trust that is not on the list. Anil pays Rs 30,000 by cheque to a local society for a religious festival. If the recipient is not within section 133(1) (for example, because its purpose is wholly or substantially religious and it is not a notified place under (b)(vi)), there is no deduction. Ask for the approval details before paying if you intend to claim.

What conditions apply to every claim?

• Money only. Section 133(4).
• Non-cash above Rs 2,000. Section 133(5).
• Paid in the tax year. Section 133(1) refers to sums paid in the tax year.
• No second claim. A sum allowed here cannot be claimed under any other provision of the Act for the same or any other tax year (section 133(3)).
• Matching data for institutions in (b)(ii). Your claim is allowed only on the basis of donation information the institution has furnished to the prescribed authority, and subject to verification under the Board's risk management strategy (section 133(6)).

Section 133 does not say whether a deduction is available under the tax regime you choose. Check that separately before you plan a donation around it.

How does an institution get approved under section 354?

For (b)(ii), a registered non-profit organisation or a Schedule VII (Table: Sl. No. 1) person applies to the Principal Commissioner or Commissioner. Conditions in section 354(1) include: not for the benefit of a particular religious community or caste; religious expenditure not above 5% of total income in a tax year; no transfer of assets to a non-charitable purpose; regular accounts; filing the prescribed statement and any correction statement; and issuing the donor a certificate of the donation amount.

Case (section 354(2))	When to apply	Approval valid for
Activities not commenced	Any time in the tax year from which approval is sought	3 tax years (provisional)
Activities commenced	Any time in the tax year from which approval is sought	5 tax years
Provisional approval, activities commenced	Within 6 months of commencement	5 tax years
Provisional approval about to expire (activities not commenced)	At least 6 months before expiry	5 tax years
Existing approval about to expire	At least 6 months before expiry	5 tax years

Under rule 187, a registered non-profit must also keep records of donations given as corpus and of donations received for renovation or repair of notified places of worship, including the donor's name, address, and PAN and Aadhaar where available, for six years from the end of the tax year. Donors should ask the institution for its approval details and the donation certificate before paying.

Which certificate and statement back a donation claim?

For an approved institution, section 354(1)(e) to (g) requires it to file a statement of donations and give each donor a certificate of the amount. Under rule 190, the statement is in Form No. 113 and the donor's certificate is in Form No. 114. Both are due on or before 31 May after the financial year in which the donation was received. Because your claim under section 133(6) rests on the institution's reported data, ask for Form No. 114 and check that the amount and your PAN match what you claim.

What about donations to political parties?

These are not under section 133. Section 136 allows an Indian company a deduction for contributions, other than in cash, to a registered political party or an electoral trust. Our guide to political party contributions covers it.

Quick reference

Point	Rule	Where
Deduction rates	100% or 50% depending on recipient	133(1)(a), (b)
Cap	10% of adjusted gross total income, for listed categories	133(2)
Form of donation	Money only	133(4)
Cash limit	Over Rs 2,000 needs a non-cash mode	133(5)
Double claim	Not allowed under any other provision	133(3)

Common mistakes

1. Applying 50% to every donation. The funds in 133(1)(a)(i) to (xxii) get 100%.
2. Forgetting the 10% cap on approved charities, or applying it to PM CARES and the other uncapped funds.
3. Using gross total income instead of adjusted gross total income for the cap.
4. Paying over Rs 2,000 in cash, even to a genuine institution.
5. Claiming without checking approval. A claim for an institution in (b)(ii) rests on the data the institution reports (section 133(6)).
6. Counting a CSR payment to Swachh Bharat Kosh or Clean Ganga Fund as a deduction.

Related deduction for research donations

Section 135 separately allows a deduction for sums paid to approved research associations, universities and colleges for scientific research or for social science or statistical research. It is not allowed if the donor's gross total income includes business or profession income, or if the contribution is in cash above Rs 2,000.

Where this is in the Act

• Rule 190: Form No. 113 (donee statement) and Form No. 114 (donor certificate), due 31 May
• Section 136: company contributions to political parties
• Section 133(1)(a): donations eligible for 100%
• Section 133(1)(b): donations eligible for 50%
• Section 133(2): 10% of adjusted gross total income limit
• Section 133(3) to (6): no double claim, money only, cash limit, verification
• Section 133(7): definitions of adjusted gross total income and charitable purpose
• Section 354: approval of institutions for 133(1)(b)(ii)
• Section 135: research donations
• Rule 63: approval of educational institutions of national eminence; rule 64: notification of sports bodies under 133(1)(a)(xxiv); rule 187: books and records kept by registered non-profits

If you handle returns for many clients, donation receipts and the 10% cap are easy to miss at year end. Finexo's practice management software helps CA firms track client documents and filing tasks in one place. It does not compute the deduction for you. For another Income Tax Act 2025 topic with a monthly compliance trail, see our guide to TDS on rent.