Deduction in case of Donation to Political Parties or Electoral Trust

An assesse can take benefit of tax deduction under section 80GGB and 80GGC for the Donations made to Political Parties or Electoral Trust.


If you are a Indian Company:
Section 80GGB - any donation made to political parties will be allowed as deduction.
Maximum Ceiling - No Limit, Entire Amount will be allowed as Deduction
Formalities - Take Form 53 from the the trust as a proof that donation is received.
Donation in Kind - No deduction for donation made in kind (Clothes, foods etc.) is not allowed.
Note - Expenditure by way of advertisement in a magazine owned by a political party is also covered u/s 80GGB.





If you are a foreign Company:
No Deduction

If you are Individual, HUF, firm, Association of Persona, Body of Incorporations:
Section 80GGC - any donation made to political parties will be allowed as deduction.
Maximum Ceiling - No Limit, Entire Amount will be allowed as Deduction
Formalities - Take Form 53 from the the trust as a proof that donation is received.
Donation in Kind - No deduction for donation made in kind (Clothes, foods etc.) is not allowed.
Note - Expenditure by way of advertisement in a magazine is not allowed.

If you are any other person:
No Deduction.



Illustrations: Gross Total Income of Mr. X is Rs.4,00,000. Gross Total Income of X & Co. is Rs.40,00,000.
Both of them have made advertisement expenditure in the magazine owned by BJP (Political Party) of Rs.10,000. Decide the amount of deduction available.
Answer: Deduction available to X & Co. (assuming Indian Company) will be Rs. 10,000 under section 80GGB. But for Mr. X not deduction available.


Rohit Jain
frohit@live.in