Political donation deductions (Section 80GGB / 80GGC) (80GGB/80GGC)
Donations to a registered political party or an approved electoral trust are 100% deductible, under Section 80GGB for an Indian company and Section 80GGC for everyone else. But three conditions apply: the donation must be non-cash (cheque, bank transfer or electronic, cash and in-kind are excluded), the recipient must be a party registered under Section 29A of the Representation of the People Act or an approved electoral trust, and the deduction is old-regime only. For a company there is also a Companies Act cap of 7.5% of the average of the last three years' net profit, reinstated when the Supreme Court struck down the electoral bond scheme in 2024. Bogus donations to non-existent or unregistered parties are a known scrutiny target, so keep proof.
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What this relief is, in plain English
If you donate to a political party properly, you can deduct the whole amount, but the rules are strict and worth respecting. Pay by cheque, transfer or electronically, never cash, and only to a party registered under Section 29A or an approved electoral trust. The deduction is old-regime only, so it does no good if you are on the new regime. Companies have an extra limit: since the Supreme Court struck down the anonymous electoral bond scheme in 2024, the old Companies Act cap of 7.5% of three-year average profit is back, along with disclosure of the party and amount in the accounts. And be honest, small 'donations' to obscure or unregistered parties to manufacture a deduction are a well-known scrutiny flag, and the deduction fails if the party is not genuinely registered.
How it works
Who claims which section
An Indian company claims under Section 80GGB; any other taxpayer (an individual, firm or HUF) claims under Section 80GGC. In both cases the deduction is 100% of the contribution to a political party registered under Section 29A of the Representation of the People Act 1951, or to an electoral trust approved by the Board. It is a Chapter VI-A deduction, so it is available only under the old regime.
Non-cash only
The contribution must be made by a non-cash mode, cheque, demand draft, bank transfer or electronic payment. A cash donation, or a donation in kind, does not qualify for the deduction at all. This is stricter than the Rs 2,000 cash limit for ordinary 80G donations: for political donations there is effectively no cash route to the deduction.
The company cap and electoral bonds
For a company, the Companies Act (Section 182) caps political contributions at 7.5% of the average net profit of the three preceding years, and requires the company to disclose the party and the amount in its profit-and-loss account. This cap and disclosure were reinforced when the Supreme Court struck down the electoral bond scheme in 2024 (which had allowed anonymous, uncapped donations), so anonymous routes are no longer available. An individual under 80GGC has no such profit-linked cap, but the non-cash and registered-party conditions still apply.
Who qualifies
- Company (80GGB) or any other taxpayer (80GGC) on the old regime
- Donation to a Section 29A registered political party or approved electoral trust
- Paid by a non-cash mode (cash and in-kind excluded)
- Company: within the 7.5%-of-3-year-average-profit cap, with P&L disclosure
- Not available under the new regime
Interactions with other reliefs
New regime
80GGB/80GGC are old-regime only; forfeited under the new regime
Section 80G donations
Political donations are separate from 80G charitable donations, with their own sections and rules
Companies Act s.182
A company's deduction is also capped by the 7.5% Companies Act limit, with mandatory disclosure
Common mistakes + audit triggers
- Donating in cash (no deduction at all for political contributions)
- Donating to an unregistered or non-existent party (a top scrutiny flag; deduction fails)
- Expecting the deduction under the new regime (old regime only)
- A company exceeding the 7.5%-of-profit Companies Act cap
- Not keeping the bank proof and the party's registration details
Worked example
Horizon Pvt Ltd, Mumbai - private company making a political contribution (2026-27)
Horizon Pvt Ltd, on the old regime, donates Rs 5 lakh by bank transfer to a Section 29A registered political party. Its average net profit over the last three years is Rs 1 crore.
Calculation: The donation is non-cash and to a registered party, so it qualifies for a 100% deduction under Section 80GGB, Rs 5 lakh off taxable income. It is within the Companies Act cap of 7.5% of the three-year average profit (7.5% of Rs 1 crore = Rs 7.5 lakh), so the full Rs 5 lakh is allowed, and the company discloses the party and amount in its profit-and-loss account. Had it paid in cash, or donated to an unregistered party, the deduction would have failed entirely. The deduction works only because the company is on the old regime.
Statute reference: Income-tax Act 2025 (Chapter VIII) (Income-tax Act 1961 ss.80GGB/80GGC) s.80GGB (companies) / s.80GGC (others); RPA 1951 s.29A registered party; Companies Act s.182 (7.5% cap). Source / notes: Year-of-Act note: old-regime only; non-cash only; electoral bond scheme struck down (ADR v Union of India, 2024).
Frequently asked questions
Are political donations tax-deductible in India?+
Can I donate to a political party in cash and claim it?+
Is there a limit on company political donations?+
Why are political donations a scrutiny risk?+
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