Section 80GGA of ITA, 1961 : Section 80Gga: Deduction In Respect Of Certain Donations For Scientific Research Or Rural Development

Explanation using Example

Imagine a software company, Tech Innovations, which is focused on developing educational technology. The company's CEO decides to contribute to the advancement of scientific research by donating to a local university's computer science department. In the financial year 2022-2023, Tech Innovations donates INR 50,000 to the university, which is approved for the purposes of section 35 of the Income-tax Act, 1961.

When Tech Innovations files its income tax return, it claims a deduction under Section 80GGA for the donation made to the university for scientific research. This deduction is allowed because the university is an approved institution for scientific research and the payment was made via cheque, which is a mode other than cash for amounts exceeding INR 10,000 as specified in sub-section (2A).

However, it's important to note that if Tech Innovations had income under the head "Profits and gains of business or profession", it would not be eligible for the deduction under this section as per sub-section (3). Additionally, since the company claimed the deduction under Section 80GGA, it cannot claim the same expense as a deduction under any other provision of the Income-tax Act for the same or any other assessment year, as stated in sub-section (4).