Section 80ggc

Eligibility to Claim Deduction under Section 80GGC

• The taxpayer or the assessee should be an individual or a person. The assessee or a person should choose a mode of payment for the donation to be done to political parties.
• The taxpayer or assessee should not be an artificial juridical person. The artificial juridical person is a public corporation established under a special act of the legislature that has a personality of its own. The artificial juridical person even though it is partially supported by the government is not allowed to claim a deduction under this section.
• The deduction under this section cannot be availed by companies. However, companies can make donations to political parties and there are exceptions to companies that cannot make donations to political parties. For example, a government company cannot make donations to political parties. Also, companies that are funded by the government either fifty per cent or a hundred per cent cannot make a deduction to political parties.
• The deduction under Section 80GG, cannot be availed by local authorities. These authorities may make a donation to political parties but are not entitled to claim a deduction under this section.

Procedure to Claim Deduction under Section 80GGC

For salaried employees, the details of donations made have to be known and sent to the employer to include the same under Form 16 which is given by the employer to the employee for filing the income tax return. The deduction made by the individual should be accepted and acknowledged by the political party. The party must provide a receipt of the deduction received by the individual. The PAN and TAN of the political party have to be provided by the individual while claiming a deduction under this section.

For deductions made by employees of an organisation, the employer should provide a certificate that the donation was made by the employee. The employee can thus claim a deduction if the employer provides a certificate that the deduction was made from the employee’s account only.

Thus, the employee should furnish his PAN, TAn, registration number with the party, name of the donor, mode of payment and amount paid to the political party to claim a deduction.

Difference Between 80GGB and 80GGC

According to Section 80GGC, an individual can claim a deduction for an amount paid to political parties provided all the conditions are met. A hundred per cent deduction is allowed to individuals in this case.

According to Section 80GGB, companies that are Indian or any Indian company can claim a deduction for an amount it donates to political parties.

Both the sections are similar in nature, but the assessees differ in both the sections and thus the deduction amount that is qualified.

Exceptions to Section 80GGC

• The major disqualification for this section is the payment of donation through the mode of cash or kind. Both these modes of paying donations have been disqualified by the government from the financial year 2013-14
• The maximum deduction that is allowed is the tax payable by an assessee. In no case can the deduction be more than the tax payable by the assessee.
• If sufficient documents are not provided at the time of filing tax and claiming the deduction, the government and the assessing officer can deny the claim to deduction under this section.
• In the case of employees, a certificate is mandatory from the employer otherwise the claim will be rejected.

FAQS