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Section 80GGC of Income Tax Act

Updated on :  

08 min read.

Section 80GGC of the income tax permits an individual to claim a tax deduction for any donations or contributions made towards any political party. So, if you opt for such tax deductions, you have the opportunity to save a good portion of income tax under Section 80GGC apart from other exemptions such as medical allowance, house rent allowance, etc.

To clearly understand the details of Section 80GGC of Income Tax Act check out below!

What is Section 80GGC?

Section 80GGC provides for tax deductions with respect to donations made by taxpayers towards political parties or any electoral trusts. 

Who can avail 80GGC deduction? 

Any Person other than:

  • companies;
  • local authorities and
  • artificial juridical person which is wholly or partly funded by the Government.

Which contributions and donations can be deducted under section 80GGC?

Deduction under 80GGC can be claimed only if you make donations or contributions to: 

  • A Political party; or 
  • An electoral trust. 

Note: Political party must be registered under section 29A of the Representation of the People Act, 1951. Any donation/contribution made to any other political party would not qualify for deduction u/s 80GGC.

Section 80GGC deduction limits

There is a certain limitation for deduction under Section 80GGC of the income tax. Here is the list of the 80GGC exemption limit:

  • 100% of a taxpayer’s donation to a registered electoral trust or political party can be claimed. However, since this section is under Chapter VIA deductions, the total deduction cannot surpass the total income of an individual donating.
  • Contributions or donations to political parties or electoral trusts in cash or any other kind are not eligible for tax deductions of Section 80GGC. This amendment was brought into effect from 2013-2014 onwards.
  • If you fail to provide sufficient documents while claiming the deduction and filing tax return, then the authority has the power to deny the tax deduction claim under this section.

Documents required for section 80GGC

In order to become eligible for claiming tax deduction under this section, you have to submit the following documents:

  • A receipt for proof of donation. 
  • The receipt must contain following details like PAN, TAN, address of the political party, fund registration number, payment method, and donor name.
  • Income tax return form must be completed and submitted within a specific time.

Procedures to avail tax deductions u/s 80GGC

The procedure for obtaining the tax deduction referred to under section 80GGC is quite simple and convenient to follow.

You can file the income tax return as you generally do. However, while filing the ITR, you have to submit the amount of the contribution under section 80GGC in the allotted space. If you are a salaried individual, you must submit relevant details of the donation to your employer so that he can include the same in the Form 16.

The party should acknowledge the donation made to that political group.  You will also have to provide the TAN and PAN of the political party when you claim for the deduction. In addition, you can claim a deduction only if your employer issues a certificate stating that a deduction took place from your account.

Conclusion

To avail of Section 80GCC tax benefit, you should have a detailed record of the donation you made. Accordingly, it is important to follow all relevant regulations of the Income Tax Act. Do remember that you are not eligible for any deduction if you make any donations in kind to the political party and this includes gifts as well.

FAQ on Section 80GGC:

What amount of deduction is available under section 80GGC?

100% of the amount donated or contributed to the political parties or electoral trusts are allowed as deduction under section 80GGC. However, the deduction cannot exceed the individual’s total taxable income. The mode of donation or contribution to the political party or electoral trust should never be in cash. Therefore donations only made through authentic banking channels like online transfers, debit cards, internet banking, and cheque are eligible for this tax deductions.