Section 80GGC – Deduction on Donation given to Political Parties

Individuals making donations to political parties can claim tax deductions under section 80GGC of the Income Tax Act. There are certain eligibility criteria to follow in order to claim deduction under this section. This article will help in understanding the various aspects that need to be kept in mind while availing deduction under section 80GGC.

What is the Eligibility Criteria to Claim Deduction u/s 80GGC?

An individual who is planning to claim a deduction under section 80GGC must comply by the following criterias:

  • One must make donations to a political party or an electoral trust to claim a deduction
    • With respect to section 80GGB and 80GGC a ‘Political Party’ is defined as a political party registered under section 29A of the Representation of the People Act, 1951
  • Any person i.e. individual, HUF, firm, an AOP, BOI or an Artificial Juridical Person can claim a tax benefit under this section
  • Any local authority or artificial juridical person that is wholly or partly funded by the government will be able to claim deduction under this section
  • Companies do not qualify to claim deduction under 80GGC
  • An assesses or the taxpayer can claim the entire (100%) contribution amount as a deduction under this section
  • This deduction falls under Chapter VI A meaning that the total amount of tax deduction must not be more than the complete assessable income of the person
Deduction under section 80GGC is not allowed if the taxpayer opts for the new tax regime
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Deduction under section 80GGC is not allowed if the taxpayer opts for the new tax regime

What are the Exceptions Under Section 80GGC?

  • As of April 1, 2014, the donation made to the political parties or electoral trusts must not be in the form of cash. Donation made in the form of cash is not eligible under this section.
  • Any donation made in the form of gifts or kind cannot be claimed as a deduction under this section

What is the Procedure to Avail Deduction Under Section 80GGC?

Below mentioned are the things one needs to keep in mind for availing deduction under 80GGC:

  • Fill out the specified ITR Form
  • Under Chapter VI-A, the section 80GGC is mentioned, one has to fill in the amount of contribution made by you to the political party of your choice
  • Individuals must submit the details of the donations to the employer for incorporating it in form 16. If not then the details must be mentioned in the specified column while submitting tax returns
  • As proof of the donation, the political party will issue a receipt. It will contain the name and address of the party, the amount donated and the PAN and TAN of the party

FAQs

What is the difference between section 80GGC and 80GGB?

Under section 80GGC deduction is allowed only to an assessee, being any person whereas under section 80GGB deductions can availed by any Indian company.

Can I claim tax benefits on donations made to more than one political parties?

Yes, one can claim a deduction on donations made to multiple political parties, u/s 80GGC.

How much tax deduction is allowed on the amount donated to a political party?

One can avail a deduction on 100% of the amount contributed, provided that the same is made by any mode other than cash.

Got Questions? Ask Away!

  1. Hey @sushil_verma

    There are a wide range of deductions that you can claim. Apart from Section 80C tax deductions, you could claim deductions up to INR 25,000 (INR 50,000 for Senior Citizens) buying Mediclaim u/s 80D. You can claim a deduction of INR 50,000 on home loan interest under Section 80EE.

  2. Hey @Dia_malhotra , there are many deductions that you can avail of. Your salary package may include different allowances like House Rent Allowance (HRA), conveyance, transport allowance, medical reimbursement, etc. Additionally, some of these allowances are exempt up to a certain limit under section 10 of the Income Tax Act.

    For eg,

    • Medical allowance is exempt up to INR 15,000 on a reimbursement basis.
    • Children education allowance is exempt up to Rs. 200 per child per month up to a maximum of two children.
    • Conveyance allowance is exempt up to a maximum of Rs. 1600 per month.

    Tax on employment and entertainment allowance will also be allowed as a deduction from the salary income. Employment tax is deducted from your salary by your employer and then it is deposited to the state government.

  3. The benefit Section 80EEB can be claimed by individuals only. An individual taxpayer can claim interest on loan of an electric vehicle of up to INR 1.5 lacs u/s 80EEB. However, if the electric vehicle is used for the purpose of business, the vehicle should be reported as an asset, loan should be reported as a liability and the interest on loan can be claimed as a business expense irrespective of the amount. (We have updated the article with the changes).

    Thus, if you have a proprietorship business, you should claim interest amount as a business expense only if the vehicle is used for business purpose. However, if it is used for personal purpose, you can claim deduction of interest u/s 80EEB in your ITR since you would be reporting both personal and business income in the ITR (under your PAN).

    As per the Income Tax Act, the deduction under Section 80EEB is applicable from 1st April 2020 i.e. FY 2020-21.

  4. Hey @Sharath_thomas , we have updated the content according to the appropriate assessment year. Thanks for the feedback.

  5. Hey @shindeonkar95

    In case of capital gain income (LTCG/STCG), transfer expenses are allowed as deduction, except STT.

    However, in case of business income (F&O, intraday), all expenses incurred for the business (including STT) are eligible to claim deduction in ITR.

    Hope, it helps!

  6. Hello,

    Is it possible to claim deductions under S. 80CCF for Infra bonds bought in the secondary market and held to maturity?

    There were a number of 10 year infra bonds issued in the 2010- 2013 period, which will start maturing soon. These are all listed on the exchanges (although hardly any liquidity or transactions in them). If I were to buy some of these bonds in the open markets and hold them in my demat to maturity (<3 years), is it possible to claim tax deductions (upto 20k per year) under 80CCF for buying?

    I couldn’t find anything on this. Any help is appreciated.

  7. Hello @Veejayy,

    Yes you can claim deduction under 80CCF for investment made in specified infrastructure and other tax saving bonds bought in the secondary market and held to maturity.

    Deduction under Section 80CCF can be availed only through investment in certain tax saving bonds, issued by banks or corporations after gaining permission from the government which shall be restricted upto 10,000 per year.

    These bonds are generally long term bonds, having tenure of more than 5 years with a lock in period of 5 years in most of the cases. These bonds can be sold after the lock in period!

    Also, interest earned on these bonds will be taxable.

    Hope this helps!

  8. Hi, I need to file my income tax for FY21, I am using Quicko platform for filing, I wanted to confirm if the ELSS investment amount for the FY21 is to be added in the section 80C, since I already the amount of Rs30,072 , should I add my ELSS amount to this existing amount and submit the total

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