Section 80GGA, 80GGB and 80GGC of Income Tax Act

Section 80GGA of Income Tax Act

Lot of institutions caught up with scientific activities, preserving natural resources, carrying rural development programmes run on charitable donations as well as grants. The salaried individuals who make donations / grants to such organisations may claim tax benefits under Section 80GGA.

Section 80GGA of Income Tax Act incorporates the following contributions :

  • Contribution to a college, university, other organisation which carries out scientific research. The college / university/ organisation must be there in the list reported by the IT department.
  • Contribution to an organisation or association which carries out specific programmes for rural development.
  • Donation made to a local authority or Public Sector Company or an association or an institution accepted by the National Committee, for undertaking and working on any entitled project or scheme.
  • The amount donated for rural development fund arrangement and reported by the Central Government.
  • The amount of contribution made to National Urban Poverty Eradication Fund set-up and reported by the Central Government.

Who can Claim Deduction under Section 80GGA?

An assessee who do not possess earnings taxable under the head ‘Profits and gains of Business or Profession’ may claim for deduction u/s 80GGA.

Therefore, salaried persons not having business income may claim for deduction under section 80GGA. In some instances salaried employees also engage into part-time business and therefore they enjoy some income from business activity like Freelancing, Part-time Teaching, earning income from commission on sale of Insurance policies etc. In such cases the individuals are not allowed to claim deduction u/s 80GGA.

Maximum Limit of Deduction under 80GGA

Under Section 80GGA, 100% of the donation may be claimed for deduction. Thus taxable income of an assessee decreases by the sum of donation given to the eligible institutions.

Section 80GGB of Income Tax Act

Donation towards Political Parties can be claimed as Tax Deduction - Section 80GGB is all about donations in respect of contributions provided by Indian companies to the political parties or electoral trust. Moreover, donation by Indian companies can be in any mode apart from cash but the political party ought to be registered u/s 29A of the People Act, 1951.

However, expenditure in the form of advertisement to magazine possesses by the political party is as well considered to be as contribution u/s 80GGB of Income Tax Act. It signifies that if a company has publicised in a magazine possessed by the political party then that particular sum will be well thought-out to be as deduction u/s 80GGB.Hence, there is no such maximum or minimum limit for this section. They have the right to donate any amount they feel like and the whole amount can be claimed as deduction.

Who can claim deduction under Section 80GGB?

Deduction u/s 80GGB can only be claimed by Indian Companies.

Amount of Deduction under Section 80GGB

An Indian company is allowed to claim 100% of the amount donated to political parties as deduction u/s 80GGB.

Section 80GGC of Income Tax Act

Deduction for an Assessee Apart from Company for Donation to Political Parties or Electoral Trust

Section 80GGC deduction is allowed to a person for donation to any of the registered ‘political party’ who is registered u/s 29A of People Act, 1951 or to the Electoral Trust.

Who can claim deduction under 80GGC?

Every person can claim deduction u/s 80GGC except the following :

  • Local authority.
  • Artificial judicial person partly or wholly subsidised by Central or State government.

Amount of Deduction under Section 80GGC

The amount of deduction allowed is 100% of the sum donated to the political party.

Conditions to Claim Tax Deductions under 80GGC

There are certain conditions that ought to be satisfied to claim deduction u/s 80GGC :

  • Donation must be paid in any of the mode apart from cash. This signifies that amount has to be given by cheque or net banking or any of the banking channels.
  • Secondly, the political party should be registered u/s 29A of the People Act, 1951.

In order to claim tax deduction, the person must have the receipt issued by political party. Moreover, this receipt must incorporate the name of the contributor; sum donated, name and address of political party and PAN and TAN as well of the political party.

Section 80GG – Tax Benefit on Rent Paid March 5, 2015

Which ITR form to fill? March 5, 2015

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