Sec 80GGB: Deduction On Contributions Made to Political Parties

Section- 80GGA Donation to political party by Indian Company

• Under this section deduction is applicable donation made by Indian Company
• Amount of deduction is 100% of donation.
• The deduction is applicable if donation is made other than cash.

Section- 80GGB Donation to political party by any person

• Under this section deduction is applicable donation made by any person.(Other than Indian company)
• Amount of deduction is 100% of donation.
• The deduction is applicable if donation is made other than cash.

Key aspects Contributions Made to Political Parties in India u/s 80GGB

Key aspects that you must remember as specified in the Income Tax Act 1961: –

1. Any company or enterprise that is registered in India is allowed to make contributions to any political party they wish to.
2. A company is allowed to make contributions to any number of political parties that it wishes to support. All contributions made under Sec 80GGB will be combined for the income tax deduction.
3. The political party that is receiving the donation must be duly registered under Section 29A of the Representation of People Act, 1951.
4. The electoral trust receiving the donation amount must be duly registered and recognized by the competent authorities.
5. Under no circumstances are cash payments allowed under Section 80GGB. The only acceptable modes of payment include cheques, demand draft, electronic transfer, or a pay order towards the bank account of the political party. This is to ensure transparency in political funding and to keep track of the money received and spent.
6. The Company can claim 100% deduction against the amount donated to a political party under section 80GGB. Therefore, you are free to make donations to political parties as per your preference and claim deductions in your income tax for the same. It is essential that you keep a proper record of the amount being paid and comply with all the regulations specified in the
7. Income Tax Act 1961. If you do not follow the set procedure, your claim for deduction might be rejected by the competent authorities.