Section 80GGC

Updated on 24 Oct, 2023

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What is Section 80GGC?

Section 80GGC provides for a tax deduction on any sum contributed in the previous year by any individual to a political party or an electoral trust. However, no deduction is applicable if the individual makes a donation in cash.

While calculating an assessee’s total income, an individual can claim any amount contributed to a political party or an electoral trust during the financial year. However, local authorities and artificial juridical persons, wholly or partly funded by the Government, are not eligible.

Deduction Under Section 80GGC

Individuals who contribute to any political party or electoral trust may avail tax deduction up to 100% of their contribution to that party. As a result, the individual’s total taxable income is reduced in proportion to the contribution made to the relevant party. In other words, a taxpayer or assessee’s entire contribution to a legitimate political party will be deducted from his or her taxable income.

How To Claim Deduction Under 80GGC?

To claim deductions under this section, donations to political parties should be made only through banking portals. A taxpayer can invest through online internet banking, cheques, debit cards, credit cards, demand drafts, and so on.

Documents Required

You need to retain documents supporting your donations. You must retain the receipt that proves the donation. The political party will issue such a receipt. Moreover, the receipt will mention information such as the donor’s name, address of the donor, PAN Number of the donor, registration number of the trust/party, mode of payment, and amount in words and numbers. You need not attach the receipt with the Income Tax Return while filing the form. However, you must retain the receipt for any further assessments or orders.

Frequently Asked Questions

Is deduction under Section 80GGB and Section 80GGC the same?

Sections 80GGB and 80GGC provide for an exemption from tax payments in order to encourage donations to political parties.
The difference between the two Sections 80GGB and 80GGC is the type of taxpayer making a donation. Section 80GGB provides a deduction for companies. On the other hand, section 80GGC provides for a tax deduction for individuals.

I have made contributions to multiple political parties. Can I claim a deduction under section 80GGC?

Yes. You can claim a deduction under 80GGC in spite of making contributions to multiple political parties. These deductions are 100% tax deductible.

Is a donation in kind eligible for a tax deduction?

No, the donations in kind are not eligible for a tax deduction. In-kind contributions, such as food, materials, clothing, and medicines, are not deductible under Section 80GGC. From the 2017-18 financial year onwards, cash donations exceeding Rs 2,000 will not be allowed as a deduction.