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Political party donations are eligible for tax deductions under Section 80GGC of the Income Tax Act.
Depending on the method of payment, a different amount of deduction may be allowed. The most that can be claimed as a deduction for a cash donation is Rs. 2,000. However, there is no upper limit for the deduction if the donation is made using a cheque or an electronic method of payment.
It is significant to remember that only contributions made to officially recognised political parties qualify for tax deductions.
It’s crucial to keep in mind that donations made from taxable income are the only ones eligible for tax deductions. There is no way to deduct non-taxable income.
You must have a receipt from the political party that lists the donor’s name, the amount donated, and the name of the political party in order to claim a tax deduction. Keep this receipt safely because you will need it to file your tax returns.
Even if the political party has provided you with a receipt, you must report the donation in order to claim a tax deduction. To avoid any problems with the Income Tax Department, make sure to include all the pertinent information about the donation in your tax return.
All contributions to political parties should be properly documented. This includes the political party’s receipt, payment documentation, and any other pertinent records.