Published 19 October 2026
A donor’s deduction for a gift to a charity does not depend on the receipt the charity hands over. It depends on two things the donor cannot see: whether the charity holds a current approval, and whether the charity has reported the donation to the Department. Since 2021, the donor’s claim has been matched against the charity’s own annual statement of donations, and a donation the charity fails to report, or reports against the wrong PAN, is a donation for which the donor’s claim can fail. This guide sets out the approval, the annual statement and the donor certificate, under both Acts, as they stand on 19 October 2026.
Which Act governs which year
The 1961 Act governs financial year 2025-26 (assessment year 2026-27) and earlier, under section 536(2) of the Income-tax Act, 2025. The 2025 Act and the Income-tax Rules, 2026 govern tax year 2026-27 onwards.
| 1961 Act | 2025 Act | |
|---|---|---|
| Donor’s deduction | Section 80G | Section 133, in particular s.133(1)(b)(ii) |
| Approval of the institution or fund | Section 80G(5)(vi) and the first to fourth provisos to s.80G(5) | Section 354 |
| Annual statement of donations | Section 80G(5)(viii); Form 10BD under rule 18AB of the 1962 Rules | Section 354(1)(e) and (f); Form No. 113 under rule 190 |
| Certificate to donor | Section 80G(5)(ix); Form 10BE | Section 354(1)(g); Form No. 114 under rule 190 |
| Fee for late statement or certificate | Section 234G | Section 429(1)(b) |
| Penalty | Section 271K | Section 464(b) |
An existing 80G approval continues. Section 355(b) defines “approval” as an approval under the second proviso to section 80G(5) of the 1961 Act or under section 354, and section 536(2)(j) continues approvals granted under the repealed Act. Approval is distinct from registration: section 355(f) says “registration” does not include an approval under section 80G(5) or section 354. A charity needs both, and they run on separate clocks.
Who can be approved, and on what conditions
Under section 354(1), the applicant is a registered non-profit organisation or a person referred to in Schedule VII (Table: Sl. No. 1). Section 133(1)(b)(ii) allows the donor’s deduction only for a gift to a fund or institution established in India for a charitable purpose that is a registered non-profit organisation (or such a Schedule VII institution) “and approved under section 354”. The conditions in section 354(1) are:
- (a) it is not expressed to be for the benefit of any particular religious community or caste;
- (b) it is established in India for a charitable purpose and does not spend more than 5 per cent of its total income in a tax year on purposes of a religious nature;
- © its constitution contains no provision for transferring any part of its assets for any purpose other than a charitable purpose;
- (d) it maintains regular accounts of receipts and expenditure;
- (e) and (f) it delivers the annual statement of donations and any correction statement; and
- (g) it furnishes a certificate to each donor.
These track section 80G(5)(ii) to (iv), (viii) and (ix) and section 80G(5B) of the 1961 Act. For section 354, “charitable purpose” excludes a purpose wholly or substantially religious (section 133(7)(b)).
The approval cycle
Section 354(2) has five cases, each with an application window, a time for the order and a period of validity.
| Case (s.354(2) Table) | Apply | Order due | Valid for |
|---|---|---|---|
| 1. Activities not commenced | At any time during the tax year from which approval is sought | One month from the end of the month of application | Three tax years from the tax year of application |
| 2. Activities commenced | At any time during the tax year from which approval is sought | Six months from the end of the quarter of application | Five tax years from the tax year of application |
| 3. Provisional approval held; activities commenced | Within six months of commencement of activities | Six months from the end of the quarter | Five tax years from the tax year of application |
| 4. Provisional approval expiring; activities not commenced | At least six months before expiry | Six months from the end of the quarter | Five tax years following the tax year of application |
| 5. Approval due to expire | At least six months before expiry | Six months from the end of the quarter | Five tax years following the tax year of application |
Section 354 has no ten-year option. The ten-year validity in section 332(5) applies to registration only. For cases 2 to 5, section 354(3) requires the Commissioner to satisfy himself about the genuineness of activities and compliance with other laws material to the objects; if not satisfied, after a hearing, he rejects a case 2 application and, in any other case, rejects it “and also cancel[s] the approval”. For case 1, section 354(4) requires him to grant provisional approval. The order is appealable to the Tribunal under section 362(1)(b)(i).
Under the 1961 Act, the first proviso to section 80G(5) set the windows: for provisional approval, at least one month before the start of the previous year from which approval is sought; for regular approval after provisional approval, at least six months before its expiry or within six months of commencement of activities, whichever is earlier; and for renewal, at least six months before expiry. The fourth proviso made an approval on a fresh application effective from the assessment year following the financial year of application.
The application is the same common form used for registration. Under rule 181 of the 2026 Rules, provisional approval is sought in Form No. 104 from the Commissioner of Income Tax (CPC), who grants it in Form No. 106 (registration and approval may be granted together, “or both”), and every other case goes in Form No. 105 to the jurisdictional Commissioner, who decides it in Form No. 107. Under the 1962 Rules, Form 10A (section codes 11 and 12) and Form 10AB serve the same purposes under rule 11AA. The procedure, the documents and the one-time re-application are described in the guide on registering a charitable trust.
The annual statement of donations
Form and content
Rule 190 of the 2026 Rules makes the Director General of Income-tax (Systems) the prescribed authority and requires the statement of particulars “in respect of each financial year, in Form No. 113”. The same form carries any correction statement under section 354(1)(f). Under the 1961 Act the statement is Form 10BD.
Rule 190(3) fixes two rules for aggregation:
- all donations “of the same nature” paid by a person during the financial year are taken together; and
- where a donation is recorded in the names of more than one person and no proportion is specified, it is attributed equally to all the donors.
Due date
Rule 190(6): the statement “shall be furnished on or before the 31st May, immediately following the financial year in which the donation is received”. For donations received in financial year 2026-27, Form No. 113 is due by 31 May 2027. For donations received in financial year 2025-26, the statement under the 1961 Act (Form 10BD) fell due on 31 May 2026.
Signing
Form No. 113 is furnished electronically, under digital signature if the donee’s return must be filed under digital signature, and otherwise through an electronic verification code (rule 190(4)). It is verified by the person authorised to verify the donee’s return under section 265 (rule 190(5)).
The certificate to the donor
Rule 190(7) requires the donee to furnish to each donor a certificate in Form No. 114 “specifying the amount of donation received from such donor during the financial year”, and rule 190(8) fixes the same date: on or before 31 May following the financial year. Form 10BE is the 1961 counterpart. A receipt issued when the money is received is not this certificate.
Why the statement decides the donor’s claim
Section 133(6) of the 2025 Act allows a donor’s claim for a donation to an approved institution “only on the basis of the information relating to such donation furnished by such institution or fund” to the prescribed authority, and subject to verification under the Board’s risk management strategy. Other limits in section 133 apply on the donor’s side: only 50 per cent of the donation is deductible under s.133(1)(b)(ii); the aggregate of such donations above 10 per cent of adjusted gross total income is ignored (s.133(2)); the deduction is only for a sum of money (s.133(4)); and a donation over ₹2,000 is deductible only if paid otherwise than in cash (s.133(5)). Under the 1961 Act, the cash limit is in section 80G(5D).
Late filing: fee and penalty
| 1961 Act | 2025 Act | |
|---|---|---|
| Fee | Section 234G(1)(b): ₹200 for every day the failure continues | Section 429(1)(b): ₹200 for every day the failure continues |
| Cap and payment | Section 234G(2): not more than the amount in respect of which the failure occurred; paid before the statement is delivered or the certificate furnished | Section 429(2): the same |
| Penalty | Section 271K(ii): not less than ₹10,000, up to ₹1,00,000 | Section 464(b): not less than ₹10,000, up to ₹1,00,000 |
The fee in section 429(1)(b) applies both to a statement not delivered within time and to a certificate not furnished. The penalty in section 464(b) is imposed by the Assessing Officer.
What to have ready
- The approval order (Form No. 106 or 107, or the 1961 order), its validity period and its Unique Registration Number.
- A donor-wise register for the financial year: name, address, PAN or Aadhaar where obtained, amount, date and mode of each donation, and whether it was corpus, specific-purpose or general. The books required by rule 187 include records of corpus donations with these particulars.
- A reconciliation of the register with the bank statements and the books, so that the total in Form No. 113 agrees with the voluntary contributions in the return.
- The list of donations recorded in joint names, with any proportion specified.
- Digital signature or EVC credentials of the verifying person.
Portal procedure
The statement and the certificates are generated on the e-filing portal at incometax.gov.in. The portal’s help pages for Forms 10BD and 10BE could not be retrieved for this guide, so screen-level steps are not described here. Rule 190 and the form itself fix the content, the authority, the date and the mode of verification.
What can be changed after filing
Section 354(1)(f) expressly allows a correction statement “for rectification of any mistake or to add, delete or update the information furnished”. Rule 190(2) requires it in Form No. 113. A correction is the route for a donation missed, a wrong PAN or a wrong amount; a donor’s deduction follows what the statement, as corrected, shows.
The procedure in order
- Confirm that both registration and approval are current, and diarise the approval renewal at least six months before expiry.
- Keep the donor register through the year with the particulars Form No. 113 needs.
- After 31 March, aggregate donations by donor under rule 190(3) and reconcile them with the books.
- File Form No. 113 (Form 10BD for financial year 2025-26 and earlier) by 31 May, verified under section 265 by DSC or EVC.
- Issue Form No. 114 (Form 10BE) to each donor by 31 May.
- File a correction statement in Form No. 113 for any error found later.
- If the date is missed, pay the section 429 fee before filing.
The next guide covers how a registered charity must apply its income, the 85 per cent rule, deemed application and accumulation for up to five years.