Donations have always been an important way for citizens to support causes, institutions, and even political parties. Under India’s tax framework, the government provides deductions for certain contributions, but these come with strict compliance requirements. One such provision is Section 80GGC of the Income Tax Act, which allows individuals to claim deductions on donations made to political parties or electoral trusts.
Recently, the Income Tax Department has advised taxpayers to verify donations claimed under Section 80GGC. This move comes amid concerns about inflated or false claims in Income Tax Returns (ITRs). To avoid penalties or scrutiny, taxpayers must ensure their donations are genuine, properly documented, and compliant with the law.
Understanding Section 80GGC
Section 80GGC provides tax deductions for contributions made by individuals to political parties or electoral trusts. Unlike other donation-related deductions, such as those under Section 80G, this one specifically targets political contributions.
The deduction is available only if the payment is made through non-cash modes such as cheque, bank transfer, or digital payment. Cash donations are not eligible. By restricting cash payments, the government ensures transparency & accountability in political funding."
This is why the Income Tax Department emphasizes that donations claimed under Section 80GGC in ITRs may be subject to verification.
Why Verification Has Become Important
The government has noticed instances where taxpayers claimed deductions under Section 80GGC without proper evidence. In some cases, deductions were claimed even when no donation was actually made. To curb this misuse, the Income Tax Department now requires taxpayers to keep clear records.
When filing returns, it is not enough to simply enter an amount. You must also make sure the organisation you donated to is eligible for the deduction. Only registered political parties & electoral trusts qualify.
This new advisory acts as a reminder that compliance is as important as claiming deductions.
Also Read: Tax Benefits on Political Donations Explained
Eligibility for Section 80GGC Deduction
Before making a claim, ensure that:
- The donation is made to a political party registered under Section 29A of the Representation of People Act, 1951, or an approved electoral trust."
- The donation is not in cash. Payments should be made via cheque, demand draft, net banking, UPI, or other traceable methods."
- You retain proper receipts or acknowledgments from the political party or trust.
- The party or trust is eligible as per government records.
Failing to meet these conditions can result in your deduction being disallowed.
Common Errors Taxpayers Make
When it comes to Section 80GGC, taxpayers often commit errors such as:
- Claiming deduction for cash donations.
- Contributing to organizations that are not eligible.
- Not keeping receipts or bank proof.
- Inflating the donation amount in ITRs.
These errors trigger scrutiny. Remember, donations claimed under Section 80GGC in ITRs may be subject to verification, and incorrect claims can attract penalties.
Documentation Required
To safely claim deduction under Section 80GGC, keep these documents ready:
- Bank transfer records or cheque copies.
- Receipt from the political party or electoral trust.
- Details of the entity’s registration & PAN.
The more transparent your records, the easier it becomes to defend your deduction if the Income Tax Department asks for clarification.
Also Read: Tax Deduction on Savings Account Interest Explained
How to Claim Donations Under Section 80GGC in ITR
Claiming the deduction is straightforward:
- Go to the “Deductions” section in your ITR form.
- Enter the donation amount under Section 80GGC.
- Provide details of the political party or trust.
- Submit supporting documents if asked during assessment.
It’s crucial to avoid exaggeration. Only actual contributions with proof should be claimed.
Why the Department Issues Such Advisories
When the Income Tax Department issues an advisory, it signals a rising trend of misuse. In this case, multiple taxpayers were found claiming deductions without real donations or by citing ineligible organizations.
By reminding taxpayers that donations claimed under Section 80GGC may be subject to verification, the department aims to discourage false claims & improve transparency in political donations."
This not only protects government revenue but also strengthens accountability in political funding.
Importance for Honest Taxpayers
For genuine taxpayers, this advisory should not be a cause of worry but a reminder to stay compliant. As long as you make sure the organisation you donated to is eligible for the deduction, and you keep proper records, your deduction will stand valid.
In fact, by being careful, you also avoid unnecessary notices, scrutiny, or delays in refund processing.
Section 80GGC vs Section 80G
A lot of people confuse Section 80GGC with Section 80G. While both deal with deductions for donations, they are different.
- Section 80G covers donations to charitable institutions, NGOs, & funds like PM Relief Fund.
- Section 80GGC exclusively deals with political contributions.
Therefore, one must be cautious while selecting the correct section in the ITR form.
Practical Example
Suppose Mr. Sharma donates ₹50,000 via online transfer to a recognized electoral trust in FY 2024–25. While filing his ITR, he claims a deduction under Section 80GGC."
Since he has a valid bank record and a receipt from the trust, his deduction will be allowed. However, if Mr. Sharma had donated in cash, or to a non-eligible group, his claim would have been rejected.
Also Read: Claim Rent Deduction Even If You Do Not Get HRA
Final Thoughts
The Income Tax Department advises verification of donations claimed under Section 80GGC for a reason: to keep political funding transparent & taxpayer compliance high. Always remember that donations claimed under Section 80GGC in ITRs may be subject to verification, and to make sure the organisation you donated to is eligible for the deduction.
With the right precautions, you can claim your deduction confidently without worrying about scrutiny.
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