{"id":28489,"date":"2025-01-31T17:19:26","date_gmt":"2025-01-31T11:49:26","guid":{"rendered":"https:\/\/carajput.com\/blog\/?p=28489"},"modified":"2025-03-08T23:58:00","modified_gmt":"2025-03-08T18:28:00","slug":"tax-dept-issue-advising-on-claims-under-section-80ggc","status":"publish","type":"post","link":"https:\/\/carajput.com\/blog\/tax-dept-issue-advising-on-claims-under-section-80ggc\/","title":{"rendered":"Tax Dept issue advising on Claims Under Section 80GGC"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_58 counter-hierarchy ez-toc-counter ez-toc-light-blue ez-toc-container-direction\">\n<p class=\"ez-toc-title\">Page Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-69d7150dc2885\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #000000;color:#000000\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #000000;color:#000000\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-69d7150dc2885\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/carajput.com\/blog\/tax-dept-issue-advising-on-claims-under-section-80ggc\/#Latest_Trends_in_Claims_Under_Section_80GGC\" title=\"Latest Trends in Claims Under Section 80GGC\">Latest Trends in Claims Under Section 80GGC<\/a><ul class='ez-toc-list-level-3'><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/carajput.com\/blog\/tax-dept-issue-advising-on-claims-under-section-80ggc\/#Official_Message_Sent_to_Taxpayers\" title=\"Official Message Sent to Taxpayers\">Official Message Sent to Taxpayers<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/carajput.com\/blog\/tax-dept-issue-advising-on-claims-under-section-80ggc\/#Possible_Motives_Behind_the_Notices\" title=\"Possible Motives Behind the Notices\">Possible Motives Behind the Notices<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/carajput.com\/blog\/tax-dept-issue-advising-on-claims-under-section-80ggc\/#What_Should_Taxpayers_Do\" title=\"What Should Taxpayers Do?\">What Should Taxpayers Do?<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/carajput.com\/blog\/tax-dept-issue-advising-on-claims-under-section-80ggc\/#Recent_Case_Laws_on_Section_80GGC\" title=\"Recent Case Laws on Section 80GGC\">Recent Case Laws on Section 80GGC<\/a><ul class='ez-toc-list-level-3'><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/carajput.com\/blog\/tax-dept-issue-advising-on-claims-under-section-80ggc\/#Lack_of_Explanation_on_Relationship_with_Political_Party\" title=\"Lack of Explanation on Relationship with Political Party\">Lack of Explanation on Relationship with Political Party<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/carajput.com\/blog\/tax-dept-issue-advising-on-claims-under-section-80ggc\/#No_Obligation_on_Donors_to_Verify_Fund_Utilization\" title=\"No Obligation on Donors to Verify Fund Utilization\">No Obligation on Donors to Verify Fund Utilization<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/carajput.com\/blog\/tax-dept-issue-advising-on-claims-under-section-80ggc\/#Political_Party_Engaged_in_Bogus_Donation_Transactions\" title=\"Political Party Engaged in Bogus Donation Transactions:\u00a0\">Political Party Engaged in Bogus Donation Transactions:\u00a0<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h2><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-28484\" src=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2025\/01\/Income-Tax-Alert-Section-80GGC.jpg\" alt=\"Income Tax Alert &quot;Section 80GGC\" width=\"1022\" height=\"961\" srcset=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2025\/01\/Income-Tax-Alert-Section-80GGC.jpg 1022w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2025\/01\/Income-Tax-Alert-Section-80GGC-300x282.jpg 300w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2025\/01\/Income-Tax-Alert-Section-80GGC-768x722.jpg 768w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2025\/01\/Income-Tax-Alert-Section-80GGC-800x752.jpg 800w\" sizes=\"(max-width: 1022px) 100vw, 1022px\" \/><\/h2>\n<h2><span class=\"ez-toc-section\" id=\"Latest_Trends_in_Claims_Under_Section_80GGC\"><\/span><span style=\"color: #000080;\"><strong>Latest Trends in Claims Under Section 80GGC<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"color: #000080;\"><strong>Introduction :\u00a0<\/strong><\/span><\/p>\n<p>Recently, many taxpayers have received messages from the Income Tax Department advising them to review their Section 80GGC deductions for donations made to political parties. \u00a0The Income Tax Department has started sending messages to taxpayers who claimed deductions under Section 80GGC\u2014pertaining to donations made to political parties\u2014in their Income Tax Returns (ITR) for the past two financial years. Taxpayers are advised to verify and, if necessary, correct their claims by filing an updated return by March 31, 2025. If an incorrect claim has been made, they are encouraged to rectify it by filing an updated return. As per Section 80GGC of the Income Tax Act,\u00a0 a taxpayer can claim a 100% deduction on donations made to political parties registered under Section 29A of the Representation of People Act, 1951.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Official_Message_Sent_to_Taxpayers\"><\/span><span style=\"color: #000080;\"><strong>Official Message Sent to Taxpayers<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>The message reads:<\/p>\n<blockquote><p>\u201c<strong>Dear Taxpayer,<\/strong><br \/>\nIt is observed that you have claimed a deduction under section 80GGC of Rs 250,000 in your ITR for A.Y. 2023-24. It is requested that the claim may be verified and the mistake, if any, may be rectified by updating the ITR for A.Y. 2023-24 by 31.03.2025.<br \/>\n<strong>Warm regards,<br \/>\nIncome Tax Department<\/strong>\u201d<\/p><\/blockquote>\n<p>While the message is advisory and not accusatory, it suggests an opportunity for voluntary correction before stricter measures are implemented.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Possible_Motives_Behind_the_Notices\"><\/span><span style=\"color: #000080;\"><strong>Possible Motives Behind the Notices<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Scrutiny of Fake Donations : <span style=\"font-size: 16px;\">By prompting taxpayers to voluntarily update their ITRs, the department aims to recover lost tax revenue. Under <\/span>Section 140B<span style=\"font-size: 16px;\">, taxpayers who voluntarily update their returns must pay an additional tax of <\/span>25% or 50%<span style=\"font-size: 16px;\">, plus interest. <\/span><span style=\"font-size: 16px;\">There is speculation that many claims, especially by salaried individuals, may not be genuine, potentially serving as a tax-saving measure.<\/span><\/p>\n<p>Preventing Misuse of 80GGC Deductions in FY 2024-25 : <span style=\"font-size: 16px;\">With only two months left in FY 2023-24, this initiative may deter taxpayers from claiming dubious deductions before the fiscal year ends, setting a precedent for FY 2024-25.<\/span><\/p>\n<p>Investigating Political Party Funding: <span style=\"font-size: 16px;\">By encouraging updated filings, the department might analyze patterns to identify political parties receiving suspiciously high donations, potentially using them as tax shelters. <\/span>If numerous taxpayers revise their returns, it could indicate that donations were used strategically for tax evasion, prompting further investigation into these political parties.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"What_Should_Taxpayers_Do\"><\/span><span style=\"color: #000080;\"><strong>What Should Taxpayers Do?<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"color: #000080;\"><strong>Precautions to Take if a Notice is Received regarding their 80GGC Claim:<\/strong><\/span><\/p>\n<p>If a taxpayer receives a notice regarding their 80GGC claim, By following below precautions, taxpayers can strengthen their case in case of scrutiny by tax authorities they should demonstrate the genuineness and reasonableness of the donation. and taxpayer must Maintain proper documentation, including:<\/p>\n<ul>\n<li>Donation receipt issued by the political party.<\/li>\n<li>Bank statements reflecting the transaction.<\/li>\n<li>Recognition certificate from the Election Commission of India confirming the party\u2019s registration under Section 29A.<\/li>\n<li>KYC details of the political party.<\/li>\n<\/ul>\n<p>Taxpayers who have legitimately donated and possess valid documentation should have no concerns. and Those who have claimed deductions without genuine donations should consider voluntarily updating their ITRs. While this may lead to additional tax payments, it could prevent further scrutiny or audits.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Recent_Case_Laws_on_Section_80GGC\"><\/span><span style=\"color: #000080;\"><strong>Recent Case Laws on Section 80GGC<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<h3><span class=\"ez-toc-section\" id=\"Lack_of_Explanation_on_Relationship_with_Political_Party\"><\/span><span style=\"color: #000080;\"><strong>Lack of Explanation on Relationship with Political Party<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>The ITAT disallowed the deduction, as the taxpayer failed to explain how he connected with the political party to which he donated 50% of his income.\u00a0The party in question was not actively engaged in elections at the regional or national level.\u00a0The taxpayer did not provide a satisfactory response to the assessing officer&#8217;s queries regarding the genuineness of the donation. The claim was disallowed due to doubts about the legitimacy of the contribution. (Case: <em>Jayeshkumar Gopalbhai Akbari vs. DCIT<\/em> [[2024] 162 taxmann 395 (Surat-Trib.)])<\/p>\n<h3><span class=\"ez-toc-section\" id=\"No_Obligation_on_Donors_to_Verify_Fund_Utilization\"><\/span><span style=\"color: #000080;\"><strong>No Obligation on Donors to Verify Fund Utilization<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>The ITAT Ahmedabad ruled that the Income Tax Act does not impose an obligation on donors to verify how the recipient political party utilizes the donation.\u00a0As long as\u00a0The donation is made through non-cash means, and\u00a0 Recipient political party is duly registered, the donor is entitled to the deduction under Section 80GGC.\u00a0The responsibility to monitor fund utilization lies with regulatory authorities, not the donor.\u00a0 The claim was allowed as all statutory conditions were met. (Case: <em>ACIT vs. Armee Infotech<\/em> [ITA No.1778\/Ahd\/2016])<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Political_Party_Engaged_in_Bogus_Donation_Transactions\"><\/span><span style=\"color: #000080;\"><strong>Political Party Engaged in Bogus Donation Transactions:\u00a0<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Investigations revealed that the recipient political party was involved in a bogus donation scheme, wherein Donors issued cheques, and\u00a0 The party returned cash in exchange, effectively making the donation fraudulent. The Principal Commissioner of Income Tax (PCIT) invoked Section 263, which allows revision of erroneous assessments. The claim was disallowed, and the PCIT\u2019s revision order was upheld. (Case: <em>Milind Pankajbhai Shroff vs. Principal Commissioner of Income Tax<\/em> [ITA No.93\/RJ T\/2023] )<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Latest Trends in Claims Under Section 80GGC Introduction :\u00a0 Recently, many taxpayers have received messages from the Income Tax Department advising them to review their Section 80GGC deductions for donations made to political parties. \u00a0The Income Tax Department has started sending messages to taxpayers who claimed deductions under Section 80GGC\u2014pertaining to donations made to political &hellip;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9],"tags":[],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/28489"}],"collection":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/comments?post=28489"}],"version-history":[{"count":5,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/28489\/revisions"}],"predecessor-version":[{"id":28891,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/28489\/revisions\/28891"}],"wp:attachment":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/media?parent=28489"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/categories?post=28489"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/tags?post=28489"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}