Have You Received an SMS from the Income Tax Department about Verification of deductions claimed in your ITR? Here’s What You Need to Know!
The Income Tax Department has recently begun sending SMS alerts to salaried taxpayers who claimed deductions under Section 80GGC in the last three assessment years (AY 22-23, 23-24, and 24-25).
Section 80GGC of the Income Tax Act, 1961, allows individuals to claim a deduction for contributions made to registered political parties or electoral trusts, provided the payment is made through non-cash modes such as cheques, drafts, or electronic transfers. This section encourages transparent political funding by disallowing cash contributions and offers no upper limit on the deductible amount. Only individuals, excluding companies, firms, or local authorities, can claim this deduction, and the political party must be registered under Section 29A of the Representation of the People Act, 1951.
While the department’s communication may sound alarming, there’s no need to panic if your donation claims are legitimate. This is simply a measure to identify potentially fraudulent claims.
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Why the Income Tax Scrutiny?
It has come to light that the Income Tax Department has identified approximately 90,000 salaried taxpayers who have wrongly claimed deductions amounting to ₹1,070 crore in their income tax returns (ITRs). The department’s objective is to ensure that the deductions are being claimed correctly and to address any discrepancies.
What Should You Do If You’ve Made a Political Donation?
If you’ve made donations under Section 80GGC in the past three years, ensure you have the following documents ready in case of any inquiries:
- Donation receipt from the political party or electoral trust
- Bank statement showing the payment made
- Any acknowledgment letter or confirmation received for the donation
What If Your Section 80GGC deduction Claim Is Correct?
If you’ve genuinely donated and your claim is accurate, there’s nothing to worry about. No immediate action is required. However, it’s always wise to keep your documentation organized and available for verification.
What If the Section 80GGC deduction Claim Was Made in Error?
If you’ve mistakenly claimed a deduction under Section 80GGC that you weren’t entitled to, it’s advisable to rectify the error by filing an updated return. Taking corrective action now can help you avoid penalties and potential legal complications in the future.
Final Word:
Stay calm, keep your records in order, and remember that this is just a precautionary measure by the Income Tax Department. If your donation claims are genuine, you’ll have nothing to fear.
Ensure compliance, stay proactive, and avoid unnecessary hassles!
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