Section 80GGC of Income Tax Act

ON THIS PAGE: What is Section 80GGC? | Investments That Come Under Section 80GGC | Eligibility Criteria for Section 80GGC  | Section 80GGC Deductions and Limits | Frequently Asked Questions about Section 80GGC    

What is Section 80GGC?

Section 80GGC is a section of the Income Tax Act, 1961 that has provisions for tax deductions of donations or contributions made by an individual taxpayer towards electoral trusts or political parties. It should be noted that, however, the tax deduction amount cannot be more than the total income of an individual.

The tax deduction under Section 80GGC of the Income Tax Act was introduced by the Income Tax Department with the aim of bringing transparency into the electoral funding for electoral trust and political parties. One of the main objectives of the 80GGC deduction is to reduce corruption in the electoral funding system. The political party referred to under this section must be registered under Section 29A of the Representation of the People Act, 1951.

Investments That Come Under Section 80GGC

Section 80GGC of the Income Tax Act covers the following list of investments/ donations that can be claimed for income tax deductions. You can claim these deductions when filing for your income tax returns.

1. Donations made to a political party registered under Section 29A of the Representation of the People Act, 1951

2. Donations made to an electoral trust

It should be noted that any donations or contributions made towards a political party not registered under the Representation of the People Act will not qualify for 80GGC deduction under the Income Tax Act.

Eligibility Criteria for Section 80GGC

The following is the eligibility criteria for Section 80GGC:

1. The tax deduction under Section 80GGC can be claimed by an individual taxpayer.

2. The deduction cannot be claimed by any local authorities or an artificial person funded in part or fully by the government.

3. The 80GGC deduction cannot be claimed by corporations or companies.

Section 80GGC Deductions and Limits

Section 80GGC of the Income Tax Act, 1961 also comes with certain limits. Here’s a list of the same:

1. The full amount or 100% of the contribution made by an individual taxpayer to a registered political party or electoral trust can be claimed as a tax deduction under Section 80GGC of the Income Tax Act. However, the deduction cannot exceed the total income of the individual making the donation.

2. Any donations or contributions made through cash are not eligible for tax deductions under Section 80GGC.

3. Only donations made through genuine banking channels such as through cheque, online transfer, debit or credit card, among others, will be eligible for tax deductions.