Quick Summary
The Income Tax Department, in a bid to curb misuse of tax deductions on political donations, has intensified scrutiny of claims made under Section 80GGC of the Income Tax Act. According to sources, the department has flagged numerous suspicious deductions over the past two to three assessment years, triggering a wave of email and SMS notices to taxpayers. Taxpayers have been asked to submit proof of donations, including bank statements and receiptsand to clarify the source of funds used for suc
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FAQ :
Section 80GGC allows for a 100% income tax deduction on contributions made to registered political parties or electoral trusts, provided the donations are made through legitimate banking channels and not in cash or kind.
The department is cracking down on potential misuse, where claims might be inflated, fabricated, or made for ineligible donations, such as those in cash or to unrecognised entities.
Taxpayers are asked to submit proof of donations, such as bank statements, receipts, and details clarifying the source of funds used for the contributions.
Taxpayers can use the updated return facility under Section 139(8A) to reverse ineligible claims. Failure to do so or making false claims could lead to penalties ranging from 100% to 300% of the tax evaded.
No, cash or in-kind donations are explicitly excluded and are not eligible for tax deduction under Section 80GGC.
The deduction is capped at 10% of the donor's gross total income, and contributions must be made to recognised political parties or registered electoral trusts.
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