Section 80GGC – Individual taxpayers can deduct donations given to an electoral trust or political party from their gross revenue under section 80GGC of the Income Tax Act. The entire donation amount made under Section 80CCG is tax-deductible. The deduction percentage, must not be greater than the overall taxable income.

  • The Section’s primary goal was to promote accountability in election financing and, as a result, to eliminate corruption. Furthermore, it urges taxpayers to make more voluntary donations to political parties.
  • Tax deductions are only available to specific taxpayers.
  • The deduction comes within Chapter VI-A deductions, which also means that the overall sum that can be claimed as a tax deduction could not exceed the total taxable revenue.

Must Read – What is Section 80G?

Who is eligible to claim deductions under Section 80GGC?

Section 80GGC allows any taxpayer to receive a deduction. The deductions under such a section are not available to an artificial judicial person or a local authority. Furthermore, donations that are eligible for deductions under section 80GGC must not be made by check, internet banking, demand draft, debit/credit card, or wire transfer from a bank. Individuals who make cash donations to any political group or election commission really aren’t qualified for deductions.

Political Party –

A political party is an organisation or individual citizen’s body in India that is approved by the Election Commission.

Electoral Integrity –

Electoral Trust is a non-profit organisation or Section 8 company established in India to collect voluntary donations from individuals and deliver them to the appropriate political parties in an appropriate fashion. The primary goal of an electoral trust is to distribute the donations it receives to a political group.

Exceptions under Section 80GGC

  • Donations paid in cash or in-kind really aren’t tax-deductible. This Section amendment entered into force beginning with the FY 2013-14.
  • Contributions to political parties shouldn’t be in the money or in kind. Some methods of donation via the bank include cheque, demand draft, wire transfer, debit or credit card, and internet banking.
  • The entire donation is deductible if it does not exceed the qualified assessee’s taxable income.

How to avail deductions under 80GGC

The method for claiming the aforementioned tax deduction under Section 80GGC is pretty simple and convenient. The taxpayer may submit their tax returns along with the sum of donation specified in Section 80GGC in the Income Tax Return form. The section is found in Chapter VI-A of the Income Tax Return Form. Contributions in any cashless manner, comprising online banking, cheques, debit cards, credit cards, demand draft, and so on, are eligible for the deduction.

The particulars of the gifts must be presented to the employer in order for them to be included in form 16. Therefore, the information must be entered in the assigned column when filing tax returns. The method for claiming the aforementioned tax deduction under Section 80GGC is pretty simple and straightforward.  The taxpayer may submit their tax returns along with the sum of donation specified in Section 80GGC in the ITR form. The section is found in Chapter VI-A of the ITR Form. Contributions in any cashless manner, comprising online banking, cheques, debit cards, credit cards, demand draft, and so on, are eligible for the deduction.

The particulars of the gifts must be presented to the employer in order for them to be included in form 16. Therefore, the information must be entered in the assigned column when filing tax returns.