Donated to the Ayodhya Ram Mandir Trust? Here’s How You Can Claim a Deduction U/S 80G

Jan 23, 2024 / Reading Time: Approx. 7 mins

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Donated to the Ayodhya Ram Mandir Trust? Here’s How You Can Claim a Deduction U/S 80G

The grand consecration or the 'Pran Pratishtha' ceremony of the Ram Mandir, Ayodhya -- constructed after nearly 500 years-long dispute -- took place in the esteemed hands of Prime Minister Mr Narendra Modi along with other dignitaries on January 22, 2024, in the presence of hundreds of seers and devotees.

Across the borders, many devotees of Lord Ram -- also called Maryada Purushottam or the virtuous man -- celebrated the day with prodigious enthusiasm with hymns and songs hailing Lord Ram, cultural and religious events, car rallies, and so on. The atmosphere was filled with Divine energy and full of festivity. On the NASDAQ screen, pictures of the Ram Temple in Ayodhya were displayed.

In his address to the nation soon after the consecration, PM Modi said, "22nd January 2024 is not a mere date on the calendar, it is the origin of a new 'kaal chakra' (cycle of time). He said this is no ordinary day, but a historic moment in the history of India and laid the foundation of thousands of years.

Reaching out to the opposition and winning the confidence of people across other faiths, PM Modi said, "Some would say Ram Temple's construction will set off a firestorm. They should reconsider, as Ram is energy, not fire. Ram is a solution, not a dispute." He also expressed that the grand temple will be a witness to the rise of magnificent India.

If you, as an individual, have made donations to the Ayodhya Ram Mandir Trust, specifically called "Shri Ram Janmabhoomi Teerth Kshetra Trust" (which is entrusted with the job of constructing the temple), or are planning to donate soon, here's how you can claim a deduction under Section 80G of the Income Tax Act, 1961.

First, note that only donations in cash, cheque, Demand Draft (DD), online transfers via National Electronic Fund Transfer (NEFT), Immediate Payment System (IMPS), and through Unified Payment Interface (BHIM, Google Pay, Paytm, PhonePe, etc.) are eligible for a deduction.

Donations in kind, say bullion, jewellery, or any other form (although of monetary value), are not eligible for deduction under the Income Tax Act.

How Much Deduction Can You Claim for Donation to Shri Ram Janmabhoomi Teerth Kshetra Trust, Ayodhya?

The donation to Shri Ram Janmabhoomi Teerth Kshetra Trust qualifies for 50% of the amount as a deduction.

That being said, there is a qualifying limit for the deduction, which is 10% of the 'Adjusted Gross Total Income'.

The Adjusted Gross Total Income is derived after deducting all the available deductions under Chapter VI A of the Income Tax Act, i.e. Section 80C to 80U (but excluding 80G) as well as income subject to special tax rates, such as capital gains, from the Gross Total Income (GTI).

So, say your GTI is Rs 10 lakh and the deduction availed under Chapter VI A under various Sections is worth Rs 2.85 lakh, then Adjusted Gross Total Income will be Rs 7.15 lakh, on which the qualifying limit of the deduction will be applied. Donation in excess of this qualifying limit is not eligible for deduction under Section 80G.

Particulars (Amt in Rs)
Gross Total Income 1,000,000
Deductions u/ch VIA
U/s 80C 150,000
U/s 80D 25,000
U/s 80TTA 10,000
U/s 80E 100,000
Adjusted Gross Total Income 715,000
a) Donation to Shri Ram Janmabhoomi Teerth Kshetra Trust 50,000
b) 10% of Adjusted Gross Total Income 71,500
Donation qualifying for deduction -- a) or b), whichever is less 50,000
Deduction u/s 80G (50% of the qualifying limit) 25,000
(For illustration purposes only)

In other words, the maximum deduction eligible for the deduction will be the actual donation money or 10% of the Adjusted Gross Total Income, whichever is less. In the example above, only Rs 50,000, i.e. the actual amount donated, since it's less than 10% of the Adjusted Gross Total Income will be eligible for a 50% deduction, i.e. Rs 25,000, under Section 80G.

In case you have made cash donations or are planning to, then keep in mind the maximum deduction allowed in such a case while filing the Income Tax Return (ITR) would be restricted to only Rs 2,000. Therefore, if you wish to avail of a higher deduction, make sure you do it via cheque, DD, NEFT, IMPS or UPI.

What Are the Documents Required to be Furnished to Claim the Deduction under Section 80G?

Ensure you take the receipt of the donation made as well as get the certificate of donation in Form 10BE from the Ram Mandir Trust, Ayodhya.

Form 10BE is mandatory as per rule 18AB of the Income Tax Rules, 1962 and under clause (ix) of sub-section (5) of Section 80G and under clause (ii) of sub-section (1A) of Section 35 of the Income Tax Act, 1961. It is obligatory on the part of charitable institutions to issue the doner Form 10BE on or before May 31 of the subsequent financial year. Note that, a lone donation receipt will not suffice to claim a deduction under Section 80G.

When your tax preparer/consultant or Chartered Accountant (CA) is filing your returns, make sure Form 10BE (certificate of donation) as well as the donation receipt are shared with him/her so that the deduction under Section 80G can be claimed legitimately.

The deduction under Section 80G (and many other deductions under chapter VI A of the Income Tax Act as well as exemptions) are available only when you opt for the Old Tax Regime. The New Tax Regime is devoid of many exemptions and deductions. Simply put, you would not be entitled to claim a deduction for donations made (as well as for investments made in tax-saving instruments) if you opt for the New Tax Regime. Hence, choose between the Old Tax Regime and the New Tax Regime sensibly. If you don't choose, the New Tax Regime will be the default tax regime.

Be thoughtful in your approach.

Happy Tax Planning and Investing!

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ROUNAQ NEROY heads the content activity at PersonalFN and is the Chief Editor of PersonalFN’s newsletter, The Daily Wealth Letter.
As the co-editor of premium services, viz. Investment Ideas Note, the Multi-Asset Corner Report, and the Retire Rich Report; Rounaq brings forth potentially the best investment ideas and opportunities to help investors plan for a happy and blissful financial future.
He has also authored and been the voice of PersonalFN’s e-learning course -- which aims at helping investors become their own financial planners. Besides, he actively contributes to a variety of issues of Money Simplified, PersonalFN’s e-guides in the endeavour and passion to educate investors.
He is a post-graduate in commerce (M. Com), with an MBA in Finance, and a gold medallist in Certificate Programme in Capital Market (from BSE Training Institute in association with JBIMS). Rounaq holds over 18+ years of experience in the financial services industry.

Disclaimer: Investment in securities market are subject to market risks, read all the related documents carefully before investing.
This article is for information purposes only and is not meant to influence your investment decisions. It should not be treated as a mutual fund recommendation or advice to make an investment decision in the above-mentioned schemes.

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