3/5/23, 10:50 PM Section 80GGC: Deduction on Donation to Political Parties

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Section 80GGC: Deduction on Donation to

Political Parties

Maharshi Shah

80GGC Chapter VI-A Income Tax Tax Benefits

Last updated on February 28th, 2023

Political donations are a way for individuals to express their support for a certain party or
candidate. Such donations are an important source of funding to function their operations
and the government allows deduction on such donations. Section 80GGC of Income Tax Act
allows taxpayers to avail of tax benefits for their contributions to political parties. Hence, if
you meet certain eligibility criteria you can claim an 80GGC deduction while filing the ITR.

INDEX

What are the Eligibility Criteria to Claim 80GGC Deduction?

Which are the Eligible entities for the Deduction?

Section 80GGC Deduction Limits

Exceptions to 80GGC Deduction

How to Claim the Deduction?

What are the Supporting Documents Required?

FAQs

What are the Eligibility Criteria to Claim 80GGC Deduction?

Below persons can claim deduction under section 80GGC of income tax act:

Individual

HUF

Firm

AOP 1

BOI
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3/5/23, 10:50 PM Section 80GGC: Deduction on Donation to Political Parties

BelowFolder
My Research persons cannot claim deduction under section 80GGC of income tax act:

Companies

Local authorities

Artificial Judicial Person that receives full or partial funding from the government

Which are the Eligible entities for the Deduction?

To qualify for 80GGC deduction, one must make a donation or contribution to the following
entities:

Political party

Electoral trust to claim a deduction

Note: With respect to sections 80GGB and 80GGC a ‘Political Party’ is defined as a political
party registered under section 29A of the Representation of the People Act, 1951.

Section 80GGC Deduction Limits

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 exceed the complete assessable income of the person.

Deduction under section 80GGC is not allowed if the taxpayer opts for the new tax
regime

Tip
Deduction under section 80GGC is not allowed if the taxpayer opts for the new tax
regime

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3/5/23, 10:50 PM Section 80GGC: Deduction on Donation to Political Parties

Exceptions to 80GGC Deduction

My Research Folder

As of 01 April 2014, the donation made to political parties or electoral trusts must not
be in the form of cash. Hence, Donation made in the form of cash is not eligible under
this section.

Furthermore, any donation made in the form of gifts or kind cannot be claimed as a
deduction under this section.

How to Claim the Deduction?

Eligible persons can claim 80GGC deduction while filing ITR if all the above-mentioned
conditions are fulfilled. The taxpayer can claim the deduction in any of the ITR forms, i.e, ITR
1, ITR 2, ITR 3, and ITR 4 depending upon their income sources.

While filing ITR, the taxpayer has to enter the amount of contribution to the political party
under Chapter VI-A under the relevant section.

What are the Supporting Documents Required?

Below mentioned are the things one needs to keep in mind for availing deduction under
80GGC:

As proof of the donation, the political party will issue a receipt. It must contain the
name and address of the party, the amount donated, and the PAN and TAN of the
party. Further, the mode of payment and donor name should also be mentioned.

Note: Individuals must submit the details of the donations to the employer for inclusion of
such information in form 16. If not, then the details must be mentioned in the designated
column while submitting tax returns.

FAQs

What is the difference between section 80GGC and 80GGB?

Can I claim tax benefits on donations made to more than one political parties?

How much tax deduction is allowed on the amount donated to a political party?

There is no cap on 80GGC deduction limit. Hence, one can avail a deduction of 100% of the
amount contributed, provided that the same is made by any mode other than cash.

Do I need to submit any proof while claiming 80GGC deduction?

1

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3/5/23, 10:50 PM Section 80GGC: Deduction on Donation to Political Parties

My Research Folder Got Questions? Ask Away!

Ridhima_Sharma 09/02/2021

sushil_verma:
Can I save more than Rs 1.5 Lakh in Taxes through deductions?

Hey @sushil_verma

There are a wide range of deductions that you can claim. Apart from Section 80C tax deductions, you could
claim deductions up to INR 25,000 (INR 50,000 for Senior Citizens) buying Mediclaim u/s 80D. You can claim a
deduction of INR 50,000 on home loan interest under Section 80EE.

Maharshi_Shah 03/04/2021

Hey @Dia_malhotra , there are many deductions that you can avail of. Your salary package may include
different allowances like House Rent Allowance (HRA), conveyance, transport allowance, medical
reimbursement, etc. Additionally, some of these allowances are exempt up to a certain limit under section 10
of the Income Tax Act.

For eg,
Medical allowance is exempt up to INR 15,000 on a reimbursement basis.
Children education allowance is exempt up to Rs. 200 per child per month up to a maximum of
two children.
Conveyance allowance is exempt up to a maximum of Rs. 1600 per month.
Tax on employment and entertainment allowance will also be allowed as a deduction from the salary income.
Employment tax is deducted from your salary by your employer and then it is deposited to the state
government.

Maharshi_Shah 01/07/2021

The benefit Section 80EEB can be claimed by individuals only. An individual taxpayer can claim interest on
loan of an electric vehicle of up to INR 1.5 lacs u/s 80EEB. However, if the electric vehicle is used for the purpose
of business, the vehicle should be reported as an asset, loan should be reported as a liability and the interest
on loan can be claimed as a business expense irrespective of the amount. (We have updated the article with
the changes).

Thus, if you have a proprietorship business, you should claim interest amount as a business expense only if the
vehicle is used for business purpose. However, if it is used for personal purpose, you can claim deduction of
interest u/s 80EEB in your ITR since you would be reporting both personal and business income in the ITR
(under your PAN).

As per the Income Tax Act, the deduction under Section 80EEB is applicable from 1st April 2020 i.e. FY 2020-21.

Maharshi_Shah 01/07/2021

Hey @Sharath_thomas , we have updated the content according to the appropriate assessment year. Thanks
for the feedback.

Sharath_thomas 01/07/2021

No issues. You’re welcome!

Kaushal_Soni 07/09/2021

Hey @shindeonkar95

In case of capital gain income (LTCG/STCG), transfer expenses are allowed as deduction, except STT.

However, in case of business income (F&O, intraday), all expenses incurred for the business (including STT) are
eligible to claim deduction in ITR.

Hope, it helps!
1

Veejayy 10/09/2021

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3/5/23, 10:50 PM Section 80GGC: Deduction on Donation to Political Parties

My Research
Hello,Folder

Is it possible to claim deductions under S. 80CCF for Infra bonds bought in the secondary market and held to
maturity?

There were a number of 10 year infra bonds issued in the 2010- 2013 period, which will start maturing soon.
These are all listed on the exchanges (although hardly any liquidity or transactions in them). If I were to buy
some of these bonds in the open markets and hold them in my demat to maturity (<3 years), is it possible to
claim tax deductions (upto 20k per year) under 80CCF for buying?

I couldn’t find anything on this. Any help is appreciated.

Bharti_Vasvani 10/09/2021

Hello @Veejayy ,

Yes you can claim deduction under 80CCF for investment made in specified infrastructure and other tax
saving bonds bought in the secondary market and held to maturity.

Deduction under Section 80CCF can be availed only through investment in certain tax saving bonds, issued
by banks or corporations after gaining permission from the government which shall be restricted upto 10,000
per year.

These bonds are generally long term bonds, having tenure of more than 5 years with a lock in period of 5 years
in most of the cases. These bonds can be sold after the lock in period!

Also, interest earned on these bonds will be taxable.

Hope this helps!

Sheirsh_Saxena 13/09/2021

Hi, I need to file my income tax for FY21, I am using Quicko platform for filing, I wanted to confirm if the ELSS
investment amount for the FY21 is to be added in the section 80C, since I already the amount of Rs30,072 ,
should I add my ELSS amount to this existing amount and submit the total

Maharshi_Shah 13/09/2021

Hey @Sheirsh_Saxena , yes, the investment amount needs to be added under 80C.

Learn by Quicko – 31 Aug 21

Section 80C : Deductions for Tax Saving Investments - Learn by Quicko

Section 80C allows you to claim deductions up to INR 1,50,000 to individuals and HUFs for specified
investments and expenses in an FY.
1
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3/5/23, 10:50 PM Section 80GGC: Deduction on Donation to Political Parties

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