Section 80GGC of ITA, 1961 : Section 80Ggc: Deduction In Respect Of Contributions Given By Any Person To Political Parties

Explanation using Example

Imagine Mr. Sharma, a salaried employee, decides to support a political party that he believes in. During the financial year, he contributes Rs. 50,000 to this political party, which is registered under section 29A of the Representation of the People Act, 1951. He makes this contribution through a cheque because Section 80GGC does not allow deductions for cash contributions.

While filing his income tax return, Mr. Sharma can claim a deduction of Rs. 50,000 under Section 80GGC of the Income-tax Act, 1961. This means that Rs. 50,000 will be deducted from his total income, reducing his taxable income and, consequently, his tax liability for that year.