Who can claim a deduction under Section 80GGC? Any taxpayer other than a company, a local authority, and an artificial juridical person wholly or partly funded by the government can claim Section 80GGC, which covers individuals, HUFs, firms, AOPs, and BOIs. The deduction is 100% of the amount donated to a political party registered under Section 29A of the Representation of the People Act, 1951, or to an electoral trust, provided the payment is made by a non-cash mode. Companies claim the same benefit under the separate Section 80GGB.
Most people know Section 80G, which gives a deduction for donations to charities, relief funds, and NGOs. Far fewer know that donations to political parties sit under two entirely separate sections, 80GGB and 80GGC, with their own eligibility rules and a stricter set of conditions. After the Supreme Court invalidated the electoral bond scheme in 2024, the rules for legally funding political parties, and claiming the deduction, became a live and frequently misunderstood question for companies and individuals alike. This guide sets out exactly who qualifies, how to pay, and how to claim.
Two sections, one purpose, different taxpayers
The split exists because companies are taxed and regulated differently from other persons, so the legislature drew a clean line:
- Section 80GGB is for Indian companies only.
- Section 80GGC is for every other taxpayer, individuals, HUFs, partnership firms, LLPs, AOPs, and BOIs, but not companies (they use 80GGB) and not local authorities or government-funded artificial juridical persons.
In substance, the benefit is the same. The difference is purely about which kind of taxpayer you are.
Section 80GGB: contributions by companies
Section 80GGB allows an Indian company to deduct any sum contributed during the year to:
- a political party registered under Section 29A of the Representation of the People Act, 1951, or
- an electoral trust.
The deduction is 100% of the contribution. Crucially, cash contributions are not allowed. This restriction links to Section 13A, under which a political party loses its own exemption if it accepts donations above a small threshold in cash, so the law closes the loop at both ends: the donor gets no deduction for cash, and the recipient loses its exemption for taking cash.
A company must also keep its contribution consistent with Section 182 of the Companies Act, 2013, which governs how and how much a company may donate to political parties and requires disclosure of the amount and the party in the company's profit and loss account. In its February 2024 electoral bonds judgment, the Supreme Court also struck down the 2017 amendment that had removed the Section 182 cap, so the limit of 7.5% of the company's average net profits of the three preceding financial years and the party-wise disclosure again apply.
Section 80GGC: contributions by everyone else
Section 80GGC gives the same 100% deduction to any person other than a company, and other than a local authority and an artificial juridical person wholly or partly funded by the government. In practice this covers:
- Individuals (salaried and self-employed),
- Hindu Undivided Families (HUFs),
- Partnership firms and LLPs,
- Associations of Persons (AOP) and Bodies of Individuals (BOI).
As with 80GGB, the recipient must be a registered political party (Section 29A) or an electoral trust, and cash payments earn no deduction.
Authorised modes of payment
The permitted modes are the non-cash banking channels:
- Account-payee cheque
- Demand draft
- Electronic transfer (NEFT, RTGS, IMPS, UPI, net banking)
Cash is the only mode that is specifically barred and results in complete denial of the deduction. Keep proof of the bank debit alongside the party's receipt.
After the electoral bonds verdict (February 2024)
The electoral bond scheme was a separate, anonymous funding route. In February 2024, the Supreme Court struck down the scheme as unconstitutional. Electoral bonds are therefore no longer an available mode of donation.
For donors who want the 80GGB or 80GGC deduction today, the practical route is simpler and more transparent: a direct, traceable bank transfer (NEFT, RTGS, or cheque) to the registered political party's own bank account, supported by a receipt. Because the payment is non-cash and traceable, it satisfies the deduction conditions and creates the documentary trail you will need if the claim is examined.
Reporting in your income tax return
Both deductions are claimed under Chapter VI-A of the Act and entered in Schedule VI-A of the ITR:
- Companies report the contribution against the 80GGB field.
- Individuals, HUFs, firms, and others report against the 80GGC field.
Documents to retain (not filed, but produced if asked):
- The receipt from the political party showing amount, date, and party details,
- The party's Section 29A registration number,
- Bank proof of the non-cash transfer.
Eligible parties, and what does not qualify
Eligible: Only political parties registered under Section 29A of the Representation of the People Act, 1951 with the Election Commission, and registered electoral trusts.
Not eligible:
- Electoral bonds (the scheme has been struck down),
- Donations to an individual candidate rather than a registered party,
- Contributions to unregistered parties or political outfits,
- Any contribution by a foreign source or with foreign political connections, which is separately barred.
How this differs from Section 80G
It is easy to confuse these sections with Section 80G, but they are distinct:
- Section 80G covers donations to charitable institutions, relief funds, and NGOs, often at 50% or 100% and sometimes subject to a qualifying-limit cap.
- Sections 80GGB and 80GGC cover donations to political parties and electoral trusts only, at a flat 100% with no qualifying-limit cap, but with the strict no-cash condition.
A donation to a registered NGO is an 80G claim. A donation to a registered political party is an 80GGB or 80GGC claim. They cannot be interchanged.
A quick worked example
Suppose a private limited company contributes Rs 5,00,000 to a registered political party by NEFT, and one of its directors personally contributes Rs 50,000 by cheque to the same party.
- The company claims Rs 5,00,000 under Section 80GGB (100% deduction), reducing its taxable business income by that amount.
- The director, as an individual on the old regime, claims Rs 50,000 under Section 80GGC (100% deduction) from his total income.
- If either had paid in cash, the deductible amount would have been zero.
The benefit is real and uncapped, but it lives entirely inside the no-cash, registered-party, old-regime conditions. Miss any one of them and the deduction collapses.
Sections 80GGB and 80GGC offer a clean, uncapped 100% deduction for funding the democratic process, but they are conditional in ways that catch out the careless. Pay by a banking channel, give only to a Section 29A registered party or electoral trust, stay on the old regime, and keep your receipt and bank proof. Get those four things right and the deduction is straightforward and safe. Get any of them wrong, especially the no-cash rule, and the entire claim falls away.
From tax year 2026-27, Sections 80GGB and 80GGC continue as Sections 136 and 137 of the Income Tax Act, 2025. This guide is based on Sections 80GGB and 80GGC of the Income Tax Act, 1961, Section 13A of the Income Tax Act, Section 29A of the Representation of the People Act, 1951, Section 182 of the Companies Act, 2013, and the Supreme Court judgment of February 2024 striking down the electoral bond scheme. It is general information for educational purposes and not a substitute for professional advice. Verify the current law and ITR utility fields before filing, and consult a qualified professional for your situation.
