Adjusted gross total income

Two of the four donation categories under Section 80G are not fully deductible — they are capped at 10% of a specific income figure. That figure is not simply the donor's total income. It is adjusted gross total income.

The workbook's own footnote definition: "Adjusted Gross Total Income is the gross total income as reduced by the portion of income on which income tax is not payable and any amount eligible for deduction under provisions of Income Tax Act. Gross Total Income being the summation of income under various heads prior to providing any tax relief."

So there are two steps to get there: start with gross total income (income from all heads, before any relief), then strip out tax-exempt income and anything already eligible for another deduction. What is left is the adjusted figure the 10% cap actually applies to.

Adjusted gross total income matters specifically for two of the workbook's four Section 80G donation categories:

The calculation runs in this order:

1. Sum income under all heads → Gross Total Income.
2. Subtract income on which tax is not payable, and any amount already eligible for a deduction elsewhere under the Act → Adjusted Gross Total Income.
3. Apply 10% to that adjusted figure to find the ceiling on the donor's qualifying-limit 80G deduction.

Only donations falling in the two qualifying-limit categories are tested against this 10% ceiling — the two no-limit categories (National Defence Fund, PM CARES and similar) are unaffected by AGTI entirely.

Illustrative figures.

Mr Verma's gross total income for the year is ₹18,00,000. Of this, ₹1,50,000 is tax-exempt agricultural income, and he has already claimed ₹50,000 as a deduction elsewhere under the Act (for instance, under Section 80C).

Adjusted Gross Total Income = ₹18,00,000 − ₹1,50,000 − ₹50,000 = ₹16,00,000.

Mr Verma donates ₹2,00,000 to a local authority to promote family planning — a 100%-deduction, qualifying-limit category. His deduction is capped at 10% of ₹16,00,000 = ₹1,60,000, not the full ₹2,00,000 he donated, and not 10% of his unadjusted ₹18,00,000 gross total income.

Had Mr Verma instead donated to the PM CARES Fund — a 100%-deduction, no-qualifying-limit category — the full ₹2,00,000 would be deductible, with no AGTI cap applied at all.

Chapter 10 (Taxation), section 10.2 (Deduction under section 80G of Income Tax Act), defines adjusted gross total income in a footnote directly tied to the two capped 80G categories. Expect a numerical question requiring the candidate to compute AGTI from gross total income before applying the 10% cap.

• AGTI is not the same as gross total income. A question giving only the unadjusted figure is testing whether the candidate remembers to subtract exempt income and other-deduction amounts first.
• The 10% cap applies only to the two "qualifying limit" 80G categories — donations to the National Defence Fund, PM's National Relief Fund, PM CARES and similar no-limit categories are not measured against AGTI at all.
• AGTI is calculated once per year for the donor, not per donation — if a donor makes several qualifying-limit donations, the combined qualifying-limit deduction is capped at 10% of AGTI in total, not 10% per donation.
• Do not confuse AGTI with application of income, which is a separate concept governing how much of an NPO's own income it must spend on its charitable objects — AGTI is about a donor's personal deduction limit, application of income is about the NPO's own compliance.