Section 80GGC of Income Tax Act

Section 80GGC is introduced by the government for the individuals who make donations to political parties or electoral trusts are eligible to claim deduction in their income tax return by fulfilling certain conditions. An individual can claim any amount of donation or contribution as deduction as there is no upper limit specified for the same under section 80GGC of the income tax act, 1961.

Section 80GGC: Contribution to Political Parties by Individuals

Purpose of Section 80GGC

The main purposes of introducing section 80GGC under income tax act, 1961 are as follows –

  1. To make reduction in corruption.
  2. To make our electoral funding system transparent.
  3. To encourage or influence people to come forward and voluntarily contribute for political parties or electoral trusts.

Entities Eligible for Deduction under Section 80GGC

An individual needs to fulfil the following eligibility criteria in order to claim deduction under section 80GGC –

  1. Any individual taxpayer can claim deduction under section 80GGC.
  2. Companies are not allowed to claim deduction under section 80GGC.
  3. Local authorities and artificial juridical persons partly or wholly receiving funds from the government are also not allowed to claim deduction under section 80GGC.
  4. An individual can only claim deduction on amount of donation in case the total amount of donation is not more than the taxable income of the individual.

Donations which qualify for deduction under Section 80GGC

Individuals can only claim deduction under section 80GGC by making donations to the following entities –

  1. Political parties registered under section 29A of the representation of the people act, 1951.
  2. Electoral trusts.

Can an individual claim deduction on donations made to multiple political parties?

Yes, an individual can claim 100% deduction on donations made to multiple political parties under section 80GGC of the income tax act, 1961.

Deduction limit under Section 80GGC

  1. There is no upper limit specified for deduction under section 80GGC. Any amount of donation/contribution to registered political party or electoral trust can easily be claimed as deduction under section 80GGC.
  2. 100% deduction is allowed on donations made by an individual under section 80GGC.

Qualifying mode of payment

In order to claim deduction under section 80GGC, an individual can use any mode of payment linked to a banking channel such as online net banking, debit card, credit card, cheque, demand draft etc.

Procedure for availing deduction under Section 80GGC

  1. An individual can avail deduction on donation made to political party or electoral trust while filing his or her income tax return. An individual need to enter his/her total amount of donation/contribution in the field 80GGC mentioned under the head chapter –VIA deductions in the income tax return form.
  2. An individual can only be able to claim deduction after making the tax payment through legitimate banking channels such as online internet banking, cheque, debit card, credit card, demand draft etc.

Exceptions under section 80GGC

Any individual making donation/contribution to political party or electoral trust is not eligible to claim deduction under section 80GGC because of the following exceptions –

  1. Any donation/contribution made by individual through cash is not eligible for deduction under section 80GGC.
  2. Any donation made in kind or affection also not qualifies for deduction under section 80GGC.

Looking for any help in income tax return filing, kindly call us at 8800221252 or you can also e-mail us at info@finacbooks.com

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