Section 80GGB: Deduction in Respect of Contributions Given to Political Parties or Electoral Trust

Section 80GGB for Deduction in respect of contributions given by companies to political parties

Eligible Assessee: Indian company

Eligible Payment: Donation given to political parties and electoral trust

Amount of Deduction: Actual payment

SECTION 80GGC: DEDUCTION IN RESPECT OF DONATION TO A POLITICAL PARTY

Eligible Assessee: Any assessee other than local authority or an artificial juridical person wholly or partly funded by the Govt.

Eligible Payment: Donation given to political parties and electoral trust

Amount of Deduction : Actual payment

Note:  If a foreign company gives donation, it can claim deduction u/s 80GGC. But if an Indian company gives donation, the deduction shall be allowed u/s 80GGB.

Reference: Section 80GGB for Deduction in respect of contributions given by companies to political parties.

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.

Explanation.—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 293A of the Companies Act, 1956 (1 of 1956).

Deduction in Respect of Donation under Section 80G

Income Tax Deduction in Respect of Donation under Section 80G of Income Tax Act, 1961. Section 80G deduction is available in respect of donation to charitable institutions, etc by any taxpayer maybe individual, company, firm or any other person. Person can claim 80G deduction for amount given in receipt or certificate of donation issued by donee. A valid 80G Certificate or receipt format must contain PAN No. of Donee, Date of Registration Certificate and its Validity with Income Tax Department, Date of Donation, Amount of Donation and Signature of  recipient. Income Tax Deduction under section 80G for donation can be calculate in three steps process –

Step 1: Gross qualifying amount –

Gross qualifying amount is aggregate of the donations made during the year to any institution/fund. Donation made in kind shall not be included.

Step 2: Net qualifying amount –

Net qualifying amount is limited to 10% of adjusted gross total income of the taxpayer as reduced by following:

  • Amount deductions available under section 80C to 80U
  • Long term capital gain
  • Short term capital gain (which is taxable under sec. 111A at the rate of 15%
  • Such income on which income tax is not payable and income referred to in sec. 115A, 115AB, 115AC, 115AD.

Step 3: amount of deduction:

Net qualifying amount is eligible for deduction on the basis given below in the table:

Donee Maximum Limit Deduction(in %of net qualifying amount)
a National Defense Fund set up by the Central Government Not Applicable 100%
b Jawaharlal Nehru Memorial Fund Not Applicable 50%
c Prime Minister’s Drought relief Fund Not Applicable 50%
d Prime Minister’s Armenia Earthquake Relief Fund Not Applicable 100%
e Prime Minister’s National Relief Fund Not Applicable 100%
f Africa ( Public Contributions- India) Fund Not Applicable 100%
g National Children’s Fund Not Applicable 50%
h Indira Gandhi Memorial Trust Not Applicable 50%
i Rajiv Gandhi Foundation Not Applicable 50%
j National Foundation for Communal Harmony Not Applicable 100%
k An Approval university/educational Institution Not Applicable 100%
l The Maharashtra Chief Minister’s Relief Fund during October 1, 1993 and October 6, 1993 and the Chief Earthquake Relief Fund Not Applicable 100%
m Any fund set up by the Government of Gujarat for providing relief to victims of Earthquake in Gujarat Not Applicable 100%
n Zila Saksharta Samiti Not Applicable 100%
o National Blood Transfusion Council and state council for Blood Transfusion Not Applicable 100%
p Fund set up by a State Government for the medical relief to the poor Not Applicable 100%
q Central welfare fund of the Army and Air Force and the Indian Naval Benevolent Fund Not Applicable 100%
r Andhra Pradesh Chief Minister’s Cyclone relief fund Not Applicable 100%
s National Illness assistance fund Not Applicable 100%
t Chief Minister’s relief fund or Lieutenant Governor’s Relief fund As given below 50%
u National Sport fund or National Cultural fund or fund by technology Development and application As given below 50%
v Any other approved* fund or any institution which satisfies conditions mentioned in section 80G(5) As given below
w Government or any local authority to be utilized for any charitable purpose other than the purpose of promoting family planning As given below 50%
x Any authority constitution in India by any law enacted either for the purpose of dealing with and satisfying the need for housing accommodation or for the purpose of planning, development or improvement of cities, towns and villages, or both. As given below 50%
y Any corporation specified in sec. 10(26BB) for promoting interest of minority community As given below
z Government or any approved local authority, institution or association to be utilized for the purpose of promoting family planning As given below 100%

Where aggregate of the sums mentioned in (u-z) exceeds 10% of adjusted gross total amount, then amt. in excess of 10% will be ignored.

Deduction in Respect of Certain Donation for Scientific Research or Rural Development under Section 80GGA

Eligible assessee:

Any person whose total income doesn’t include income chargeable u/s 28.

Eligible payment:

Payment to an institution approved for the purpose of section. 35, 35AC, 35CCA.

Amount of deduction:

Actual payment

Notes:

  1. Although an assessee having income chargeable u/s 28 can’t claim deduction under this sec, yet he can claim deduction under section 35,35AC, 35CCA while computing income taxable u/s 28.
  2. It is specifically provided that the deduction of donation given to the institute approved u/s 80GGA shall not be denied to the donor even if, after giving of donation, the approval granted to those institute/associations is withdrawn.

Deduction in Respect of Rent Paid under Section 80GG

Income Tax Deduction in respect of Rent Paid under Section 80GG of the Income Tax Act, 1961.Section 80GG is applicable to individual salaried taxpayer who is not receiving House rent allowance (HRA) and should not own any residential accommodation. Then individual can claim deduction for rent paid subject to maximum of Rs 2,000/- per month.

Conditions and Calculation for deduction under section 80GG

  1. The taxpayer should be an Individual
  2. The taxpayer is an employee but he does not get house rent allowances during the previous year from the employer
  3. The taxpayer files a declaration in form no. 10BA* regarding the expenditure incurred by him towards payment of rent. : Download Income Tax Form 10BA
  4. The persons (taxpayer, spouse, adopted/minor child or HUF of which the taxpayer is member) should not own any residential accommodation.
  5. If the taxpayer owns a residential accommodation at any other place, then in respect of that house the concession is not claimed by him [under sec. 23(2)(a) or 23(4)9a). 

Amount of deduction-

Least of the following-

  • Rs. 2,000 per month
  • 25 % of adjusted GTI
  • The excess of actual rent paid over 10% of total income.
  • Actual amount paid

Adjusted GTI=

Gross total income
Less: Long term capital gains
Less: Short term capital gain (at the rate of 15%)(sec.111A)
Less: Income referred to in (sec. 115A or 115D)
Less: Amount deductible (80CCC to 80U)( except 80GG)

XXXXX

XXXXX

XXXXX

XXXXX

XXXXX

Total income for the purpose of section 80GG

XXXXX

Notes:-

  1. If the assessee resides in a concessional house provided by the deduction in respect of rent paid can be claimed under this section.
  2. The assessee must submit a declaration in Form No. 10BA alongwith the return of income.

List of Income Tax Deduction under section 80C, 80CCG, 80D, 80DD, 80E,80G, 80GG to 80U

Deduction in Respect of Contribution to Pension Scheme Notified by Central Government under Section 80CCD)

Deduction in Respect of Contribution to Pension Scheme as per section 80CCD of the Income Tax Act,1961. Deduction under this section is available to individual only when he made the contribution to the pension scheme approved by central government. Read List of Investment on which Income tax deduction under 80C is available 

The conditions are as follows:

  • The assessee should be an Individual
  • He is employed by Central Government or any other employer on or after January 1, 2004.
  • A self employed person can claim the benefit of this deduction
  • Any amount deposited or paid by assessee under the pension scheme notified by the central Government.

Note: if the above conditions are satisfied then the following consequences given by section 80CCD should be noted:

  • The assessee’s contribution to the notified pension scheme deductible in the year in which contribution is made
  • If the employee’s contribution exceeds 10% of salary then no deduction is available
  • If contribution by taxpayer (not being an employee) exceeds 10% of his gross total income, the excess shall not be taken into consideration for the purpose of section 80CCD
  • Contribution by the employer to the notified pension scheme is deductable u/s 80CCD(2) in the year in which contribution is made
  • No rebate will be allowed u/s 88 in respect of amount on which deduction has been claimed u/s 80CCD
  • The aggregate amount of deduction u/s 80C, 80CCC, 80CCD cannot exceed Rs.100000

Deduction in Respect of Subscription to Long Term Infrastructure Bonds under section 80CCF

Deduction in Respect of Subscription to Long Term Infrastructure Bonds under section 80CCF of Income Tax Act, 1961.This Deduction is available only for AY 2011-12 and 2012-13. Discontinued from AY 2013-14.

The conditions for claiming deduction under section 80CCF are as follows:

  • The assessee is an individual or a HUF
  • Deduction under this section is available only for the assessment years 2011-12 or 2012-13
  • An individual or a HUF can claim deduction of the amount paid or deposited to the maximum of Rs. 20000 during the previous year as subscription to notified long term infrastructure bonds
  • This deduction will be over and above the existing overall limit of deduction on savings of up to rs.100000 under section 80C, 80CCC and 80CCD.

Reference: Section 80CCF of Income Tax Act, 1961

Deduction in respect of subscription to long-term infrastructure bonds.

80CCF. In computing the total income of an assessee, being an individual or a Hindu undivided family, there shall be deducted, the whole of the amount, to the extent such amount does not exceed twenty thousand rupees, paid or deposited, during the previous year relevant to the assessment year beginning on the 1st day of April, 2011 or to the assessment year beginning on the 1st day of April, 2012, as subscription to long-term infrastructure bonds as may, for the purposes of this section, be notified by the Central Government.

Deduction in Respect of Contribution to Pension Fund Section 80CCC

As per section 80CCC of the Income tax Act, 1961 Individual can claim income tax deduction for amount deposited in any annuity plan of the LIC of India or any other insurer for receiving pension from a fund referred to in section 10(23AAB) but maximum deduction under section 80C, 80CCC and 80CCD can’t exceed Rs 1 Lakhs. Read Income Tax 80C Deduction for life insurance, provident fund, ULIP, Mutual Fund,tuition fees, Housing Installment, Term Deposit, NSC

CONDITIONS:

The conditions for deduction are as follows:

  • The assessee should be an Individual
  • Any amount deposited and paid by assessee in any annuity plan of the LIC of India or any other insurer for receiving pension from a fund referred to in section 10(23AAB)
  • The deduction shall be restricted to Rs.100000

AMOUNT OF DEDUCTION: Investment in Top ELSS (Tax Saving/Equity Linked Saving Scheme) Mutual Funds

If the aforesaid conditions are satisfied, then the amount, deposited or

Rs.100000, whichever is lower, is deductable.

Notes :

The other points should be kept in mind:

  • After claiming deduction, the assessee and his nominee should surrender the annuity, before the maturity date of such annuity
  • The surrender value shall be taxable in the hands of assessee or his nominee as the case may be in the year of receipt
  • Pension will be taxable in the hands of assessee or his nominee as the case may be in the year of receipt
  • The maximum amount deductable under sec. 80CCC is Rs.100000
  • The aggregate amount of deduction u/s 80C, 80CCC, 80CCD cannot exceeds Rs.100000

Income Tax Deduction under section 80CCA for investment in National Savings Scheme or payment to a deferred annuity plan

Deduction in respect of contribution to certain pension funds.

80CCC. (1) Where an assessee being an individual has in the previous year paid or deposited any amount out of his income chargeable to tax to effect or keep in force a contract for any annuity plan of Life Insurance Corporation of India or any other insurer] for receiving pension from the fund referred to in clause (23AAB) ofsection 10, he shall, in accordance with, and subject to, the provisions of this section, be allowed a deduction in the computation of his total income, of the whole of the amount paid or deposited (excluding interest or bonus accrued or credited to the assessee’s account, if any) as does not exceed the amount of ten thousand rupees in the previous year.

(2) Where any amount standing to the credit of the assessee in a fund, referred to in sub-section (1) in respect of which a deduction has been allowed under sub-section (1), together with the interest or bonus accrued or credited to the assessee’s account, if any, is received by the assessee or his nominee—

             (a)   on account of the surrender of the annuity plan whether in whole or in part, in any previous year, or

             (b)   as pension received from the annuity plan,

an amount equal to the whole of the amount referred to in clause (a) or clause (b) shall be deemed to be the income of the assessee or his nominee, as the case may be, in that previous year in which such withdrawal is made or, as the case may be, pension is received, and shall accordingly be chargeable to tax as income of that previous year.

(3) Where any amount paid or deposited by the assessee has been taken into account for the purposes of this section, a rebate with reference to such amount shall not be allowed under section 88.

The following sub-section (3) shall be substituted for the existing sub-section (3) of section 80CCC by the Finance Act, 2005, w.e.f. 1-4-2006 :

(3) Where any amount paid or deposited by the assessee has been taken into account for the purposes of this section,—

              (a)   a rebate with reference to such amount shall not be allowed under section 88 for any assessment year ending before the 1st day of April, 2006;

              (b)   a deduction with reference to such amount shall not be allowed under section 80C for any assessment year beginning on or after the 1st day of April, 2006.