What is Section 80GGC?
Section 80GGC under the Income Tax Act, 1961 provides tax deduction benefits on donations made by any individual to political parties subject to certain conditions. It should be noted that there is no upper limit specified under section 80GGC, which means any amount contributed to a political party can be claimed as a tax deduction.
Eligibility Criteria for Claiming Tax Benefits Under Section 80GGC
- Under section 80GGC, only individual taxpayers are allowed to claim tax benefits.
- To claim tax benefits, donations should not be made in cash. All other modes of donations except cash are eligible for claiming a tax deduction.
- Donations must be made to a registered political party under section 29A of Representation of People Act (RPA), 1951. Donations made to electoral trust also will be eligible for claiming tax deduction under section 80GGC.
Deduction Limit under Section 80GGC
- There is no limit specified under section 80GGC. Therefore, any amount contributed to an electoral trust or a registered political party (u/s 29A of the RPA, 1951) can be claimed for the tax deduction.
- The donations made u/s 80GGC are 100% tax deductible.
What is the difference between section 80GGC and section 80GGB?
Both section 80GGC and 80GGB provide tax deduction benefits on political donations. However, under section 80GGC, only individual taxpayers can claim tax benefits while under section 80GGB companies can claim tax benefits on political donations.
Also Read: Know More About Section 80GGB
Can I claim tax deduction on contributions made to charitable organizations?
Contributions made to charitable organizations can be claimed for a tax deduction. However, such tax deductions can be claimed only under section 80G of the Income Tax Act, 1961.
Can I claim tax benefits on donations made to multiple political parties?
Yes, you can claim a tax deduction on donations made to multiple political parties, u/s 80GGC. You don’t need to be a member of the political party to claim tax benefit on your donations. However, contributions must not be made in cash.