Section 80GGC is a part of Chapter VI-A of the Income Tax Act, 1961 which include deduction towards donations made to Political Party or Electoral Trust.
This section was added in the Finance Act 2009, with the objective of introducing transparency into electoral funding.
Important Update on Donation Deductions
The Income Tax Department has started verifying donation deductions those who claimed deduction under Section 80GGC in ITRs for AY 2023-24 and AY 2024-25.
Taxpayers who claimed this deduction are receiving message to verify their claims and take necessary actions by 31.03.2025.
Message over 80GGC Deduction –
| Dear Taxpayer, XXXXXXXXXXX (Pan no: XXXXXXXX) It is observed that you have claimed deduction under section 80GGC of Rs XXXXXXXX in your ITR for A.Y. 2023-24. It is requested that the claim may be verified and mistake, if any, may be rectified by updating the ITR for A.Y. 2023-24 by 31.03.2025. Warm regards Income Tax Department. |
Action for Taxpayers
Who are Eligible to Claim 80GGC Deduction?
Individuals who donate to a registered political party or electoral trust.
Who Cannot Claim?
- Companies
- Local authorities
- Artificial juridical persons funded by the government.
Note:
Deduction are not applicable on TDS on an individual’s salary. Only employees who draw a salary with no other income from business can avail deductions u/s 80GGC while filing tax return.
Donation Contribution
Contribution to political parties must be made through modes of payments such as cheque, demand draft or electronic transfer.
No deduction shall be allowed in respect of any sum contributed in cash.
Maximum Limit
There is no maximum limit applicable on the contributions made to the political parties u/s 80GCC of the Income Tax Act.
Note:
The political party who are receiving the donation must be duly registered u/s 29A of the Representation of People Act 1951.
The electoral trust receiving the donation amount must be duly registered and recognized by the competent authorities.
Deduction Limit
100% of the amount contributed can be claimed as deduction.
Documents Required
To qualify for tax deduction you must have the following documents:
- Donation receipts for proof.
- The receipt must include details such as PAN, TAN, the political party’s address, fund registration number, payment method and donor’s name.
- Completion and timely submission of the ITR form.
FAQs
Only individual taxpayers can claim this deduction. Companies, local authorities, and government-funded entities are not eligible.
No, donations made in cash are not eligible for deduction u/s 80GGC.
Yes, incorrect deductions may lead to penalties, interest, and even scrutiny by tax authorities.
Yes, salaried individuals can claim the deduction while filing their Income Tax Return.