Contribution not to be in cash for deduction u/s. 80GGB & s. 80GGC

1. Any sum contributed by an Indian company to any political party or an electoral trust in the previous year, is allowed as deduction in computing the total income of such Indian company under section 80GGB. However cash contributions shall not be allowed as deduction under his section.

Section 80GGB reads as:

80GGB. In computing the total income of an assessee, being an Indian company, there shall be deducted any sum contributed by it, in the previous year to any political party or an electoral trust :

Provided that no deduction shall be allowed under this section in respect of any sum contributed by way of cash.

For the removal of doubts, it is hereby declared that for the purposes of this section, the word “contribute”, with its grammatical variation, has the meaning assigned to it under section 182 of the Companies Act, 2013.

2. A deduction similar to section 80GGB is available to an assessee, being any person other than local authority and artificial juridical person wholly or partly funded by the Government under section 80GGC. Here also cash contribution is not allowed as deduction.

Section 80GGC reads as:

80GGC. In computing the total income of an assessee, being any person, except local authority and every artificial juridical person wholly or partly funded by the Government, there shall be deducted any amount of contribution made by him, in the previous year, to a political party or an electoral trust :

Provided that no deduction shall be allowed under this section in respect of any sum contributed by way of cash.

Explanation.—For the purposes of sections 80GGB and 80GGC, “political party” means a political party registered under section 29A of the Representation of the People Act, 1951 (43 of 1951).

(Republished With Amendments)

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