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What are the tax deductions available on donations to a political party?

You can secure tax deductions for donations to political parties under Section 80GGC. The Income Tax Act encourages contributions to political parties by allowing tax deductions for this section without a limit.

What Eligibility Criteria Should Be Met To Claim Tax Deductions:Under Section 80GGC, you must meet three criteria to claim tax deductions for donations to political parties.

  • You must be an individual taxpayer to claim the tax benefit.
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  • Donations cannot be made in cash. The accepted modes are cheques, demand drafts, and online banking. This is done to maintain transparency in the political system.
  • Third, you can only make donations to political parties registered under Section 29A of the RPA. Donations to registered electoral trusts are also eligible for tax deductions.

Other points to note:

  • You can donate to multiple parties too without worrying about tax benefits. The donation has to follow the same criteria as the previous point.
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  • You don’t have to be a party member to claim tax deductions for donations to political parties you choose.
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  • Donations in kind cannot be claimed as a tax benefit either. They must be in monetary form.

RPA and Political Parties to donate To:The Representation of the People Act (RPA) governs all political parties in India. Associations and bodies of Indian citizens wanting to become a formal political party need to register under Section 29A of this Act. With this, they can contest in elections and receive other provisions from the RPA.

This law allows other citizens to make donations to political parties that accept their voluntary contributions. It includes companies and individual citizens but excludes donations from foreign sources so citizens and companies of other countries. There are a total of 2,143 parties that are registered with the Election Commission under RPA. So, you can donate to any of these parties that you wish to see contest successfully in the next election.

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