Section 80GGC Deduction: Eligibility, Limit and ITR Filing

Introduction

Section 80GGC deduction allows eligible taxpayers to claim a tax deduction on donations made to registered political parties or electoral trusts through non-cash modes. Until FY 2025-26, this benefit was governed by Section 80GGC of the Income-tax Act, 1961. From April 1, 2026, the corresponding provision is Section 137 of the Income-tax Act, 2025. The deduction is subject to prescribed conditions, including the taxpayer’s applicable tax regime.

What is Section 80GGC deduction?

Section 80GGC of the Income-tax Act, 1961 allows eligible taxpayers to claim a deduction for contributions made to:

• A political party registered under Section 29A of the Representation of the People Act, 1951
• An eligible electoral trust

The section applies to eligible persons other than local authorities and artificial juridical persons that are wholly or partly funded by the government. Indian companies generally claim a deduction for eligible political contributions under Section 80GGB. From Tax Year 2026-27 onwards, the corresponding provision for Indian companies is Section 136 of the Income-tax Act, 2025.

The deduction applies to the amount contributed through a non-cash payment method. Taxpayers should note that donations to charitable institutions are governed separately under Section 80G of the Income Tax Act.

Important Update Under the Income-tax Act, 2025

The Income-tax Act, 2025, came into force on April 1, 2026 and replaced the Income-tax Act, 1961 for income earned from Tax Year 2026-27 onwards. Matters relating to FY 2025-26, including returns filed for AY 2026-27, continue to be governed by the Income-tax Act, 1961.

Under the new law:

Section 80GGC has been replaced by Section 137.

Section 80GGB for company contributions has been replaced by Section 136.

The essential conditions remain similar, including the requirement that the contribution must not be made in cash.

Section 137 permits eligible taxpayers, other than excluded entities, to claim a deduction for non-cash contributions made to registered political parties or electoral trusts.

Therefore, an updated article should refer to both provisions:

• Section 80GGC: Applicable to FY 2025-26 and earlier periods
• Section 137: Applicable from Tax Year 2026-27 onwards

Eligibility Criteria for Section 80GGC Tax Deduction

Section 80GGC deduction is not restricted only to individual taxpayers. Subject to the applicable provisions, it allows eligible assessees to claim a deduction for qualifying contributions made to a registered political party or an electoral trust.

The following taxpayers may claim the deduction:

• Individuals, including salaried and self-employed individuals
• Hindu Undivided Families
• Partnership firms
• Limited Liability Partnerships
• Associations of Persons
• Bodies of Individuals
• Other eligible non-company taxpayers

Partnership firms, LLPs, AOPs and BOIs should also review the applicable requirements for Form ITR-5 filing.

A salaried employee can claim the deduction even when salary is the only source of income. Having business or professional income is not a requirement.

However, the following taxpayers cannot claim the Section 80GGC deduction:

• A local authority
• An artificial juridical person wholly or partly funded by the government
• An Indian company claiming a deduction for an eligible political contribution, as Indian companies are specifically covered under Section 80GGB. From Tax Year 2026-27 onwards, the corresponding provision is Section 136 of the Income-tax Act, 2025.

The contribution must be made to a political party registered under Section 29A of the Representation of the People Act, 1951, or to an eligible electoral trust.

For FY 2025-26 and earlier, individuals, HUFs, AOPs, BOIs and specified artificial juridical persons covered by Section 115BAC generally cannot claim the Section 80GGC deduction under the default new tax regime. They must opt for the old tax regime to claim it. From Tax Year 2026-27 onwards, the corresponding new tax regime is governed by Section 202 of the Income-tax Act, 2025, under which the Section 137 deduction is generally not available. This restriction does not apply in the same manner to partnership firms and LLPs.

Important Points About Political Party Donations Under Section 80GGC

Section 80GGC allows eligible taxpayers to claim a deduction for contributions made to registered political parties or electoral trusts. The following points must be considered:

Eligible Donations

The contribution must be made to:

• A political party registered under Section 29A of the Representation of the People Act, 1951
• An eligible electoral trust

A direct donation to an individual election candidate or an unregistered political organization does not qualify under this section.

Payment Methods

The donation must be made through a traceable non-cash method, such as:

• Account payee cheque
• Demand draft
• NEFT
• RTGS
• IMPS
• UPI
• Debit card
• Credit card
• Internet banking

No deduction is available for a contribution made in cash, irrespective of whether the amount is below or above ₹2,000. The ₹2,000 cash limit applicable to certain charitable donations under Section 80G does not apply to Section 80GGC. Under Section 80GGC, every cash contribution is ineligible.

Deduction Limit

Section 80GGC does not prescribe a separate maximum deduction limit of ₹20,000.

An eligible taxpayer may generally claim the full amount of the qualifying contribution. However, deductions under Chapter VI-A cannot create a loss or exceed the taxpayer’s gross total income.

For example, if an eligible taxpayer contributes ₹50,000 through a bank transfer to a registered political party, the taxpayer may claim the full ₹50,000, subject to the applicable tax regime and other provisions of the Income-tax Act.

Documents Required

Form 10BB is not required for claiming a deduction under Section 80GGC. Form 10BB is an audit report applicable to certain trusts, institutions, universities, educational institutions, and hospitals. It is not a declaration form for political donations made by taxpayers.

The taxpayer should obtain and retain:

• A donation receipt issued by the political party or electoral trust
• The name and PAN of the political party or electoral trust
• The contribution amount and payment date
• The payment method
• The cheque number, UTR number or transaction reference
• A bank statement showing the payment
• Registration details of the political party, where available

The receipt should ideally include the donor’s name, the amount contributed, the payment date, the payment method, the recipient’s details and the signature of an authorised person.

Disclosure in the Income Tax Return

The contribution must be reported in the relevant Section 80GGC schedule of the applicable ITR form.

The Income Tax Department requires taxpayers claiming the deduction to provide additional information, including the name and PAN of the political party.

How to Claim the Section 80GGC Deduction

Verify the Recipient: Confirm that the donation is made to a registered political party or eligible electoral trust.

Choose the Tax Regime: For FY 2025-26 and earlier, taxpayers covered by Section 115BAC should opt for the old tax regime to claim Section 80GGC deduction. From Tax Year 2026-27 onwards, taxpayers covered by Section 202 should opt out of the default new tax regime to claim the corresponding deduction under Section 137. Taxpayers should check the provisions applicable to them.

Make a Non-Cash Payment: Pay through cheque, demand draft, bank transfer, UPI, card, or another electronic method. Cash donations are not eligible.

Obtain a Receipt: Collect a receipt containing the donor’s name, recipient’s name and PAN, amount, date, payment mode, and transaction reference.

Claim in the ITR: Enter the contribution details in Schedule 80GGC or the relevant deduction section of the applicable ITR form.

Keep Supporting Proof: Retain the receipt and payment evidence. These documents are not normally attached to the ITR but may be required for verification.

Professional ITR Filing Assistance

Claiming the Section 80GGC deduction requires accurate reporting of the donation, recipient details, payment method, and applicable tax regime.

How Ebizfiling Helps

• Selects the appropriate ITR form
• Checks eligibility for the deduction
• Reports political donation details correctly
• Calculates taxable income accurately
• Assists with return filing and e-verification
• Provides post-filing support when required

Ebizfiling’s Income Tax Return Filing service helps taxpayers claim eligible deductions correctly and avoid errors while reporting political donations in the ITR.

Conclusion

Section 80GGC allows eligible taxpayers to claim a deduction for genuine, non-cash contributions made to registered political parties or electoral trusts. There is no separate ₹20,000 deduction limit, and every cash contribution is ineligible. Taxpayers should select the correct tax regime, verify the political party’s registration, obtain a complete receipt, and retain banking evidence. For income earned from April 1, 2026 onwards, taxpayers should refer to Section 137 of the Income-tax Act, 2025 instead of Section 80GGC.

Frequently Asked Questions