Introduction
Donating to a political party is one way individuals can contribute to the democratic process. But when it comes to claiming a tax deduction under Section 80GGC of the Income Tax Act, 1961, there’s often confusion — especially around donations made to political parties that are registered but not recognised by the Election Commission of India (ECI).
So, do such donations qualify for deduction?
Let’s break it down with legal clarity and practical insight.
What is Section 80GGC?
Section 80GGC allows individuals to claim a deduction for contributions made to:
- A political party, or
- An electoral trust
Conditions:
- The donation must be made in a mode other than cash (i.e., cheque, UPI, net banking, etc.)
- The donor must be an individual. This section is not applicable to companies, local authorities, or government-funded bodies.
What Kind of Political Party Qualifies?
The Income Tax Act clearly states that to claim a deduction, the political party must be:
“Registered under Section 29A of the Representation of the People Act, 1951.”
This means the party does not need to be a recognised national or state party. Registration under Section 29A is sufficient.
Registered vs. Recognised – Key Difference
| Basis | Registered Party | Recognised Party |
|---|---|---|
| Legal Status | Registered with ECI under Section 29A | Registered and has performed well enough in elections |
| Recognition | Not necessarily recognised | Recognised as a National or State party by the ECI |
| Eligibility under 80GGC | Eligible for deduction | Eligible (but not mandatory to be recognised for deduction) |
What This Means for 80GGC Deduction
You can claim the deduction even if the political party is not recognised, as long as it is registered under Section 29A of the Representation of the People Act.
Recognition is not a criterion. The Income Tax Act only requires registration.
Example to Clarify
Scenario:
Ms. Neha donates ₹5,000 online to a newly formed political party. The party is registered under Section 29A, but it is not yet recognised by the ECI.
- Party is registered – ✅
- Donation is via digital mode – ✅
- Hence, deduction under Section 80GGC – Allowed
Key Points Before Donating
- Check ECI Registration: Ensure the political party is registered under Section 29A. You can verify this on the official Election Commission website.
- Avoid Cash Donations: Any donation in cash, even ₹1, makes you ineligible.
- Retain Proof: Keep payment confirmations or bank receipts for audit or verification purposes.
- Declare in ITR: Mention the donation and claim the deduction properly in your Income Tax Return.
Frequently Asked Questions (FAQs)
Q1. I donated to a political party that is registered but not recognised. Can I still claim a deduction?
Yes. Recognition is not required. As long as the political party is registered under Section 29A and donation is non-cash, you are eligible.
Q2. Is there a limit to how much I can claim under Section 80GGC?
No limit. The entire donation amount (excluding any cash payments) can be claimed as a deduction. There is no upper cap.
Q3. Can I claim the deduction if I donate to an independent election candidate?
No. Only donations to registered political parties or electoral trusts are allowed. Donations to individuals are not eligible.
Q4. Can companies claim deduction under Section 80GGC?
No. Section 80GGC applies only to individuals. Companies must use Section 80GGB for similar deductions.
Q5. What if I donated ₹500 in cash?
That donation becomes ineligible under Section 80GGC. The law clearly requires that the entire amount must be paid in non-cash mode.
Conclusion
Section 80GGC offers a clean and transparent way for individuals to support political causes while availing a tax benefit. However, confusion around the requirement of recognition often leads to missed deductions.
To clarify:
- Recognition is not required.
- Registration under Section 29A is sufficient.
- Only non-cash donations qualify.
Always verify the party’s registration, donate digitally, retain proof, and file your return accordingly.
A small step in the right direction — backed by compliance — ensures your contribution supports democracy and saves tax too.
Stox N Tax 
Leave a comment