Tax Deduction for Political Donations under Section 80GGC

Support Political Parties: Donations to political parties help fund their operations and campaigns. The government encourages this by offering tax deductions. Eligibility Criteria: Individuals, Hindu Undivided Families (HUF), firms, Associations of Persons (AOP), and Bodies of Individuals (BOI) not funded by the government can claim deductions under Section 80GGC. Companies and government-funded entities are not eligible.

Eligible Entities: Donations must be made to a registered political party under Section 29A of the Representation of the People Act, 1951, or an electoral trust. Deduction Limits: Taxpayers can claim 100% of their contributions made through non-cash modes (banking channels like internet banking, credit/debit cards, etc.). The total deduction can't exceed the taxpayer's total assessable income.

No Cash Donations: Only non-cash contributions are eligible. Donations in cash or as gifts in kind do not qualify for deductions under this section. Claiming the Deduction: Eligible taxpayers can claim the deduction when filing their Income Tax Return (ITR) using forms 1, 2, 3, or 4, depending on their income sources.

Required Details: Taxpayers must provide the date, amount of contribution, transaction reference number, cheque/IMPS/NEFT/RTGS number, and IFS code of the bank. Supporting Documents: A receipt from the political party is required, containing the party's name, address, PAN, payment mode, and donor's name. This receipt should be submitted with the ITR or to the employer for inclusion in Form 16.