Individuals who make contributions towards a political party can avail deductions for the same under Section 80GGC in the range of 50% - 100% of the contributed amount. As per the rules of the Income Tax Act, individuals can donate as much as 10% of his or her gross earnings to any of the political parties of their personal choice. One has to donate the amount strictly through bank either by cheque, demand draft or online internet banking or wire transfer or through the use of debit or credit card. Any offerings in cash or kind to political parties or electoral trust are not eligible for deduction under this section.
Entities to which contributions or donations can be made under this section
- Any political party in India which has registered itself under Section 29A of the Representation of the People Act of 1951.
- An electoral trust
Procedure to avail deductions under Section 80GGC
- Any kind of contributions made towards a political party has to be mentioned under Section 80GGC by the assessee at the time of filing Income Tax Returns. This section appears under Chapter VI-A deductions in the ITR form.
- Any kind of donations made towards the political parties should be made solely through proper banking channel via the use of cheques, debit card, payment of cash, online transactions, credit card and so on in order to claim deductions under Section 80GGC.