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There are 2 different sections for donation to political parties
Section 80GGB-Its for Companies only
Section 80GGC -Its for all except some
Lets study these in detail
Section 80GGB
Donation to Political parties/Electoral Trust by Companies
- The deduction is allowed to only Indian companies
- Donation made by cash not allowed as deduction
Section 80GGC
Donation to Political parties/Electoral Trust by Persons other than companies
- The deduction is allowed to all except
- Local Authority
- Artificial judicial person partly or wholly funded by Government
- Donation made by cash not allowed as deduction
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.
| Particulars | Amt | Donation to Political Party |
| Income from Salaries | xx | |
| Income from House Property | xx | |
| Profits and Gains of Business and Profession | xx | <----Disallowed here as per Sec 37(2B) |
| Income from Capital Gains | xx | |
| Income from Other Sources | xx | |
| Gross Total Income | xx | |
| Less | ||
| Deductions | xx | <----Allowed here (S ec 80GGB and 80GGC ) |
| Net Total Income | ||
| Tax on Net total Income | xx |
Note:-
What is Electoral Trust
Electoral Trust is a non-profit company created in India for orderly receipt of the voluntary contributions from any person and for distributing the same to the respective political parties
Why Companies prefer Electoral Trust?
When companies donate to electoral trusts they do not reportedly have the compulsion of disclosing the parties to which they have made contributions
Example Aditya Birla Group's General Electoral Trust.
