If a donor gives less than ₹2,000 in cash, is it mandatory for the organisation to collect the donor’s identity proof or any specific donor details? Further, if the donor is not interested in claiming tax exemption and does not require Form 10BE, is the organisation still required to report such donation in Form 10BD? If Form 10BD reporting is not required in such cases, how should such donations be shown in the books of accounts?
Clarification is also required on how the ₹2,000 cash donation limit should be understood. Is this limit applicable:
per donor per day;
per donor per financial year;
per receipt; or
as an overall daily cash donation limit for the organisation?
For example, can an organisation receive cash donations below ₹2,000 from multiple donors on the same day?
Also, is receiving more than ₹2,000 in cash from one donor prohibited, or is the restriction only relevant for issuing donation receipts and allowing tax exemption benefits?
Collecting name and address is essential for cash donation less than 2k also so as not to be considered anonymous donation. Statement of donation in Form 10 BD and issue of donation receipt in Form 10BE is obligatory for an entity having 80G approval. Whether donor uses the donation receipt to claim 80G benefit is of no consequence nor should be a matter of concern for the organization.
The non eligibility of cash donation beyond Rs.2k under 80G is for the entire financial year, now tax year.
An organization can receive cash donation of under Rs.2k per day from multiple donors but their identity should be known is strongly advised.
Receiving cash donation beyond Rs. 2k from a donor is not prohibited for the organization, only that the donor will not be able to claim 80G benefit.
Please note restriction on cash donations of Rs.2 lakhs per day from a person/single transaction/transactions for an event/occasion for an NGO as per section 186 of ITA 2025 entailing equivalent amount of penalty.