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Donation to a political party

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Mitesh Shah

Article

92 Points Posted on 16 March 2023

what is the idle % of our total income for which we wish to donate and not have any notice from the department...

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Quick Summary

This discussion clarifies the rules around company donations to political parties. Companies can claim donations up to 100% of their total taxable income, provided it doesn't exceed 7.5% of their average net profit over three years. Acceptable payment methods include cheques, demand drafts, electronic transfers, or pay orders directly to the party's bank account. It's important to note that these donations do not qualify for 80G tax deductions.

Dhirajlal Rambhia

SEO Sai Gr. Hosp.

212450 Points Posted on 16 March 2023

Companies can claim up to 100% of their donation as long as it is less than their total taxable income. The only acceptable modes of payment include cheques, demand draft, electronic transfer, or a pay order towards the bank account of the political party.

However, Companies Act 2013 states that the contribution cannot be more than 7.5% of their annual net profit (average of 3 years).