Section 80G amendment: donation deductions are capped at 10% of gross total income under the substituted provision.

The amended section 80G, substituted from 1 April 1981, changed the deduction basis so that qualifying donations themselves were restricted to 10% of the gross total income. The explanatory memorandum indicates that the amendment was intended to override the earlier judicial approach under which 50% of a donation could be allowed subject to a separate ceiling. On this construction, the Income-tax Officer's computation reflected the amended law, and the contrary appellate view failed to account for the statutory change.

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Issues: Whether, for the assessment year 1981-82, the deduction under section 80G was to be computed by allowing 50% of the donation subject to a ceiling linked to the gross total income, or whether the amended provision required the aggregate of qualifying donations to be restricted to 10% of the gross total income.

Analysis: The amended version of the provision, introduced by substitution with effect from 1 April 1981, altered the basis of computation. The explanatory memorandum showed that the amendment was intended to remove the effect of the earlier judicial view and to ensure that the donations eligible for deduction themselves did not exceed 10% of the gross total income. On that construction, the computation made by the Income-tax Officer accorded with the amended law, and the contrary view taken by the appellate authority overlooked the statutory change.

Conclusion: The assessee was not entitled to the higher deduction allowed by the appellate authority. The computation made by the Income-tax Officer was correct.

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