Question 1

Who is eligible for 80GGB?

Accepted Answer

80GGB (Donations for Scientific Research or Rural Development) is eligible for Indian companies, including foreign companies that operate in India and earn income. It applies to private and public sector companies, provided they make eligible donations as specified under the Income Tax Act.

Question 2

What is the limit for 80GGB and 80GGC?

Accepted Answer

There is no specified limit for deductions under section 80GGB (Donations for Scientific Research or Rural Development) or 80GGC (Contributions to Political Parties). However, the deduction amount is limited to the amount donated, and you can claim the full amount as a deduction from your taxable income.

Question 3

What is the difference between 80GGB and 80GGC?

Accepted Answer

The main difference between 80GGB and 80GGC lies like the donations:

80GGB (Donations for Scientific Research or Rural Development): This section pertains to donations made by companies to entities engaged in scientific research or rural development. Companies can claim deductions on such donations.

80GGC (Contributions to Political Parties): This section pertains to contributions made by individuals or companies to registered political parties. Both individuals and companies can claim deductions on these contributions.

Question 4

What is 80GGC threshold limit?

Accepted Answer

No specific threshold limit is mentioned under section 80GGC (Contributions to Political Parties) for claiming deductions. You can claim deductions on the entire amount contributed to registered political parties, subject to certain conditions specified in the Income Tax Act. However, please note that you need to make contributions through banking channels to be eligible for deductions, and cash donations are not eligible for deductions under this section.

Question 5

What is the maximum tax deduction limit under Section 80GGB?

Accepted Answer

According to the Income Tax Act, there is no upper limit for using Section 80GGB to claim a tax deduction. Tax deductions are available for all contributions made to political parties for upto 100%.

Question 6

Can an individual claim 80GGB deduction?

Accepted Answer

Not necessarily, the advantages are only available to certain taxpayers. Tax deduction may be made by businesses.

Question 7

Which donation is eligible for 100% deduction?

Accepted Answer

Donations greater than ₹2,000 must be made in a method other than cash that is qualified for deductions under Section 80GGB. As per the regulations outlined under Section 80GGB the contributions will be qualified for detection of upto 100%.

Question 8

Who can claim deductions under 80GGB?

Accepted Answer

Any business is permitted to donate for numerous parties of their choice. However the political parties should be registered under Section 29a of the Representation of the People Act of 1951. Only then these contributions are tax free.

Question 9

What Is the Maximum Tax Deduction Limit Under Section 80GGB?

Accepted Answer

There is no higher limit for applying a tax deduction under Section 80GGB. The full amount given to a political party is deductible from taxes. However, as per this rule, only businesses can claim only up to 7.5% of their net income for the previous three years.

Question 10

Is it required that a company should only invest in one political party?

Accepted Answer

No, the choice to support one political party over another is entirely up to the business. However, following the donation, the businesses are required to note it in their financial statements along with the name of the organisation that received the monies. If the business doesn't want the name of the party made public, it can donate electoral bonds.

Deductions Under Section 80GGB

FAQ's on Deductions Under Section 80GGB

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