80G donation AIS reconciliation - what happens, how to fix

When a donor files their ITR claiming an 80G deduction, the income-tax system reconciles the claim against the donee NGO's Form 10BD filing via AIS (Annual Information Statement). Mismatches cause donor refunds to be denied, scrutiny notices to be issued, and inevitably get blamed on the NGO. This guide explains the reconciliation mechanic, why mismatches happen, and how to fix them.

How AIS reconciliation works

The flow:

1. NGO files Form 10BD by 31 May listing all donors who gave ≥ ₹2,000 in the prior FY, with PAN.
2. The income-tax system ingests Form 10BD data and pushes it into each donor's AIS under the "Donation to NGO" head.
3. When the donor files ITR claiming 80G deduction, the system compares: (a) the deduction amount claimed; (b) the donation amount in AIS.
4. If amounts match within tolerance, claim accepted. Refund processed.
5. If amounts don't match (claim > AIS amount), the system flags the claim. CPC reduces the deduction to the AIS amount automatically, or issues a Section 143(1) intimation asking for clarification.

Why mismatches happen

1. NGO didn't file Form 10BD - donor's AIS shows ₹0 donation. Claim entirely denied.
2. NGO filed Form 10BD late - donor files ITR before NGO's 10BD lands in AIS. Initial claim denied; donor must revise.
3. Donor PAN missing or wrong in 10BD - AIS can't match the donation to the donor's account. Claim denied.
4. Aggregated amount mismatch - donor claims ₹50K, but 10BD reports the aggregate as ₹45K (donor double-counted or NGO under-recorded).
5. Cash vs cheque classification - cash donations > ₹2,000 are NOT 80G-eligible. If NGO marked it as cheque but donor reported as cash (or vice versa), discrepancy.
6. Donor used a different PAN - happens with HUFs, where the donation was made by an individual but claimed on HUF return.

What a donor sees when there's a mismatch

The donor's ITR is processed under Section 143(1). They receive an intimation that says:

• Deduction claimed: ₹50,000
• Deduction allowed: ₹45,000 (or ₹0 if no AIS match)
• Variation: ₹5,000 (or ₹50,000)
• Additional tax payable: at slab rate

The donor can either (a) accept and pay the additional tax; (b) file a rectification request under Section 154; (c) ask the NGO to revise the 10BD filing.

The donee-side correction process

When a donor reports a mismatch, the NGO must:

1. Identify the donor in the 10BD records.
2. Verify what was reported vs what should have been reported.
3. File a revised Form 10BD via the income-tax portal - the original ARN remains, but the donor record is corrected.
4. Issue a revised Form 10BE certificate with the corrected amount.
5. Send the revised 10BE to the donor.
6. Donor files a Section 154 rectification with the original ITR + revised 10BE.

Revised 10BD filings are accepted on the portal but appear as a separate entry under the original ARN. The system reconciles the latest entry.

How to avoid mismatches in the first place

1. Capture PAN at the time of donation - make it mandatory above ₹2,000. Donateazy's donation form requires PAN above this threshold; without PAN, the donation is recorded but flagged as "10BD-not-eligible."
2. File Form 10BD by 31 May - early-filers (April or May) get into AIS before donors start filing ITRs in June-July.
3. Verify PAN validity - use the income-tax portal's PAN-name verification API to ensure the PAN you have actually belongs to the donor name. Donateazy auto-runs this on every donor record.
4. Reconcile aggregates per donor per FY - if a donor makes 12 donations of ₹5,000 across the year (₹60,000 total), 10BD reports the aggregate ₹60K, not 12 rows of ₹5K. Donateazy auto-aggregates.
5. Distinguish cash vs digital - only digital (UPI / card / NB / cheque) donations above ₹2,000 are 80G-eligible. Cash above ₹2,000 is NOT - don't report it in 10BD. Donateazy flags this at receipt time.
6. Distribute Form 10BE to donors before they file ITRs - once 10BD is filed and AIS is updated, send 10BE PDFs so donors have the reference number to cite.

Common operational errors

1. Reporting donations below ₹2,000 - 10BD only captures ≥ ₹2,000. Reporting below clogs the system unnecessarily.
2. Reporting anonymous donations - donations without PAN should NOT be reported in 10BD. They're separately taxed under §115BBC.
3. Multiple PANs for same donor - when a donor uses different PANs (e.g. HUF for some donations, individual for others), report under the PAN they'll use to claim.
4. Receipt date vs realisation date - for cheque donations, the donation is recognized on realisation, not on receipt. Stale cheques shouldn't go in 10BD.
5. Donation reversed but still in 10BD - refunded donations must be excluded. Donateazy auto-syncs reversals to 10BD records.

What Donateazy does automatically

• PAN capture + validity check at donation time
• Auto-flags cash donations above ₹2,000 as 10BD-ineligible
• Auto-aggregates per-donor per-FY for 10BD reporting
• Auto-generates 10BD CSV by 31 May
• Auto-distributes 10BE certificates via email/WhatsApp once IT-portal ack is recorded
• Auto-reverses 10BD records on donation refund
• Compliance dashboard surfaces every 10BD row with status flags (PAN valid / invalid, donation type mismatch, etc.)

Frequently asked questions

What if a donor's ITR is already filed when we discover the 10BD mismatch? File revised 10BD. Donor files Section 154 rectification with revised 10BE.

Can a donor claim 80G without 10BD evidence? Yes - claims can be made on Form 10BE alone, but if AIS doesn't have the entry, CPC may reduce or deny. Better to have 10BD filed.

How do I know if my 10BD has reached AIS? Donors can check their AIS in the income-tax portal. The donee NGO can ask the donor to verify.

What if a donor never gives PAN? Donations above ₹2,000 from anonymous donors are NOT 80G-eligible. Report under "anonymous" if total exceeds ₹20K aggregate (taxable under §115BBC).