At My Startup Solution, we specialize in helping you better understand the tax benefit by donation to NGO or political parties. Our staff understands all the legal provisions in India about the enabling of NGOs and trusts to accept gifts and funding from political parties. We provide all-inclusive registration solutions that aid the NGOs in the funding application to the political parties. We have the right skills to ensure that these NGOs can comply with the necessary regulations and have access to the much-needed funds. This way, the NGOs can concentrate on their specific mandates, secure in the knowledge that their compliance requirements are well taken care of.
So, what is Section 80GGC of Income Tax Act? The Income Tax Act, of 1961 allows a deduction on income tax for the amount a taxpayer contributes to a registered political party or an Electoral Trust. Therefore, if a registered political party receives any donations, Section 80GGC can be claimed. Offering tax benefits on donations allows Section 80GGC to encourage people to advance the causes of democratic politics and strengthen party systems. It's important to make it clear that this section is applicable only concerning gifts made to registered political parties or electoral trusts, not to any other individuals or unregistered organizations.
Certain requirements must be met for a taxpayer to be able to claim a political party donation deduction for individual under Section 80GGC. There are deductible contributions that, as part of an individual taxpayer’s income, save for companies, local authorities, and other artificial judicial persons that are recipients of government funds. Contributions may only be made to registered political parties or electoral trusts, and cash contributions above Rs. 2,000 are ineligible. A declaration of undertaking to the effect of Form 10BB has to be made to claim the deduction and such a donation must be reported on the income tax return. By meeting these criteria, an individual can enjoy the maximum cash donation to political party granted by the law under Section 80GGC.
Section 80GGC of the Income Tax Act of 1961 provides these incentives to individuals making donations to political parties or electoral trusts. The main features of this section are highlighted below:
The limit of donation under section 80GGC is straightforward. If you donate to registered political organizations or electoral trusts, you can get a 100% tax deduction on those donations. This grant even includes the total of the donation. There is no ceiling amount for the donation but it needs to ensure that the declaration is filed and the donation has been received by a registered party.
There are some important restrictions with charitable contributions under Section 80GGC that taxpayers using a deduction should keep in mind. These consist of:
Claiming the charitable contribution deduction under Section 80GGC requires some documents. To put only a few as an example, there are politically received trust donations, declaration Form 10BBs, and bank passbooks or statements with the donation transaction. Furthermore, taxpayers have to also keep evidence of the donation from the political party or the electoral trust along with the PAN card details of that political party or the electoral trust. You should be careful with such documentation, for it may prove helpful when claiming tax deductions later on.
There are instances when the failure of political party donation deduction for individuals under Section 80GGC occurs. For instance, if one chooses to contribute to an unapproved or unregistered party or electoral trust, one of the foremost thoughts that come to mind is in reference to how claiming for deductions is not possible. Also, cash donations exceeding Rs. 2000 do not qualify for tax deductions. In addition, companies, municipal corporations, and other artificial legal entities funded by the government are also prohibited from making claims for such tax deductions under this section.
To avail of deductions under 80GGC, follow the mentioned steps:
There is always a section or clause that is prepared for every situation. For this instance, these donations are provided a clause for individual taxpayers within Section 80GGC of the Income Tax Act of 1961. From registered political parties or electoral trusts, individuals can get a tax deduction on the donation made. The donation can be made via check, draft, or online transfer, and that section of the act brings about a 100% tax deduction.
There is a counterpart to this clause, which is 80GGB, and it applies to all Indian companies. It allows companies to get a tax deduction for the donations given to registered political parties or electoral trusts. This, too, is provided a clause of 100 % tax deduction on the donation when made via cheque, draft, or online transfer. The only difference between the two sections is that Section 80GGC pertains to individual taxpayers, while Section 80GGB applies to Indian companies.
At My Startup Solution, we understand the challenges of getting donations from political parties. Our professionals have successfully assisted many NGOs in getting registered under 80GGC, allowing them to operate smoothly without much hassle. All the burdensome tasks related to the whole procedure are left to us so you can pay attention to your business.
By hiring our professionals at +91-7081220800 for your donation needs under 80GGC of Income Tax Act, you can rest assured that your application will be processed efficiently. The expertise and guidance of our experts will help you navigate the regulatory requirements with ease.
The Income Tax Act of 1961 allows a deduction on income tax for the amount a taxpayer contributes to a registered political party or an electoral trust.
Any company or local authority cannot apply for donation deductions under Section 80GGC. Contributions may only be made to registered political parties or electoral trusts, and cash contributions above Rs. 2,000 are ineligible.
Politically received trust donations, declaration Form 10BBs, and bank passbooks or statements with the donation transaction and PAN card details.
To register under 80GGC, make a donation, obtain a receipt, request Form 10BB from the political party or electoral trust, and, after completing the income tax return, submit it with the tax deduction claim and retain documents.
Section 80GGB is the counterpart of Section 80GGC that allows companies to get a tax deduction for the donations given to registered political parties or electoral trusts.
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