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
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
Under section 80GGC deduction is allowed only to an assessee, being any person whereas under section 80GGB deductions can availed by any Indian company.
Yes, one can claim a deduction on donations made to multiple political parties, u/s 80GGC.
One can avail a deduction on 100% of the amount contributed, provided that the same is made by any mode other than cash.