Can You Save Taxes by Donating to War Relief? Here's What You Should Know

When conflict arises, particularly between India and its neighbours, many citizens step forward to support the armed forces and affected civilians. One common and effective way to help is through financial contributions to war relief efforts. But beyond humanitarian intent, such donations may also provide an income tax deduction, provided certain conditions are met.

This article outlines the key provisions under the Indian Income Tax Act that apply to donations made for war relief, helping you understand when and how such contributions qualify for tax benefits.

Legal Framework: Section 80G of the Income Tax Act

Section 80G of the Income Tax Act, 1961 was introduced to incentivise charitable giving by allowing taxpayers to claim deductions for donations made to eligible institutions. The provision applies to a wide array of organisations, including those engaged in national defence and emergency relief.

However, deductions under Section 80G are only available to individuals who opt for the old tax regime. Taxpayers who have shifted to the new regime introduced under Section 115BAC in FY 2020-21 are not eligible to claim these deductions.

Eligibility Criteria for War Relief Donations

Whether your donation qualifies for a deduction depends on two primary factors:

• The nature of the recipient organisation, and
   
• Its approval status under Section 80G.

Only contributions made to approved institutions are eligible. This ensures that tax benefits are extended solely to legitimate and accountable entities.

Government-Approved Funds: 100% Deduction Without Limit

Certain government-recognised funds offer full tax deductions without any upper limit on the donation amount. These include:

• National Defence Fund – Supports the operations and welfare of the armed forces.
   
• Prime Minister’s National Relief Fund (PMNRF) – Provides emergency disaster and war relief to civilians.
   
• Armed Forces Welfare Funds – Such as the Army Central Welfare Fund, Indian Naval Benevolent Fund, and Air Force Central Welfare Fund.

Donations to these funds allow for 100% deduction with no cap, making them particularly beneficial from a tax perspective.

Charitable Organisations Involved in War Relief

In addition to government funds, several registered charitable institutions may be actively involved in war relief, providing shelter, medical aid, or rehabilitation.

In such cases, the deduction available could be:

• 100% of the donated amount, limited to 10% of adjusted gross total income, or
   
• 50% of the donation, also subject to the 10% limit, depending on the institution’s categorisation and 80G registration.
   

What iIs Adjusted Gross Total Income?

To calculate your deduction ceiling, you need to understand Adjusted Gross Total Income (AGTI). It is computed by excluding the following from your gross income:

• Deductions under Sections 80C to 80U (excluding 80G)
   
• Exempt income under Section 10
   
• Long-term capital gains
   
• Short-term capital gains under Section 111A
   
• Incomes taxed under special rates (Sections 115A, 115AB, etc.)
   

The 10% limit on donations applies to this adjusted figure, not your total income.

Conditions to Claim the Deduction

To claim a deduction under Section 80G for war relief donations, the following conditions must be fulfilled:

Mode of Payment

Donations exceeding ₹2,000 must be made through non-cash methods, such as cheque, bank transfer, credit card, UPI, or similar digital modes.

Receipt Documentation

Retain a proper donation receipt, which must include:

• Name and address of the receiving institution
   
• PAN of the donee organisation
   
• Donor’s name and donation amount
   
• Valid Section 80G registration number and period of approval

Additional Form (if applicable)

For specific deductions (like 100% without limit), Form 58A may be required to be filled and retained.

Tax Regime Choice

Only individuals under the old tax regime are allowed to claim these deductions. The new tax regime does not permit any exemptions or deductions under Section 80G.

How to Claim the Deduction

Here’s a step-by-step overview of how to claim the deduction in your income tax return:

1. Declare the Donation in ITR
   Report the donation under the ‘80G’ section of your ITR (e.g., ITR-1 or ITR-2).
    
2. Upload Documentation
   Keep the donation receipt and Form 58A (if needed) ready for upload or reference during filing.
    
3. Verify the Donee
   Ensure that the recipient is a registered 80G entity. You can verify this via the Income Tax Department’s official portal.
    
4. File Within Due Date
   Ensure your return is filed within the stipulated due date to avail of the deduction for the relevant financial year.

Read More: ITR Filing 2025: Opting for Old Tax Regime? Know Why Form 10-IEA is Mandatory. 

Example Scenarios

Example 1: National Defence Fund

Ms. Anjali donates ₹50,000 to the National Defence Fund in FY 2024–25. Since this fund qualifies for 100% deduction without limit, and she opts for the old regime, she can claim the entire ₹50,000 as a deduction under Section 80G.

Example 2: War Relief NGO

Mr. Ram donates ₹1,00,000 to a registered NGO engaged in war relief. If the NGO qualifies for a 50% deduction with a 10% AGTI cap, and Mr. Ram’s adjusted income is ₹8,00,000, he can claim ₹40,000 as a deduction (i.e., 50% of ₹80,000, which is 10% of AGTI).

Conclusion

While donating to war relief funds is, first and foremost, an act of compassion, Indian tax law under Section 80G does offer an incentive for such altruistic contributions. To make the most of the potential tax benefit, ensure you donate to recognised institutions, maintain proper documentation, and file under the old tax regime.

This approach not only supports those in need during times of national crisis but also aligns with the government's efforts to encourage responsible and impactful giving.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.