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Under the Income Tax Act, 1961, Section 80GGA allows for the tax benefits in the form of 100% deductions of donations made by the assessees towards the scientific research and rural development, provided the donation is made in any mode other than cash. However, the deductions are subject to a satisfaction of certain conditions mentioned under the said section. Let’s understand Section 80GGA in detail!
Section 80GGA allows donations for contributions towards scientific research and rural development. All assessees can claim deduction under this section except those whose total includes an income chargeable under the head ‘profits and gains from business or profession’. To qualify for the deduction under Section 80GGA, the donation must be made to those entities that are approved by the prescribed authority for the purposes of scientific research or rural development. It is worth noting that a 100% deduction of the amount contributed can be claimed under Section 80GGA, provided the donation is made in any mode other than cash.
Conditions for Claiming Deduction under Section 80GGA
Following conditions should be satisfied for availing 100% deduction under Section 80GGA:
If the amount of donation exceeds INR 10,000, it should be made in any mode other than cash.
An assessee whose total income includes the income from ‘profits and gains from business and profession’, shall not be allowed to claim deduction under Section 80GGA.
Once a deduction for the donation made to the relevant assessment year is allowed, no other deduction under the Income Tax Act, 1961 can be claimed in the same or any other assessment year.
The donation made to an entity has been approved by the prescribed authority for the purpose of scientific research or rural development.
Donations in kind are not eligible for deduction under this section.
Points to Remember to Claim Deduction under Section 80GGA
To claim the deduction under Section 80GGA, the assessee should remember the following points:
Donation to an approved institution: It is essential to ensure that the donation is made to an approved institution. If the approval is withdrawn later, it will have no effect on the previously made donation. As a result, the institute must be an approved one while receiving the donation.
Obtain Form 58A: The approved institutions receiving contributions or donations under Section 35AC must issue Form 58A to the donor. This certificate will facilitate the donor to claim a 100% deduction under Section 80GGA, provided the donation is made in any mode other than cash. As a result, obtaining Form 58A from the institute is the mandatory requirement for availing the deduction.
Multiple deductions under Section 80GGA: An assessee cannot claim multiple deductions with respect to Section 80GGA, if claimed once in a particular assessment year.
Documents Required to Claim Deduction under Section 80GGA
Certain documentary evidence would be required to claim deduction under Section 80GGA. Following documents would be required to claim the deduction:
Stamped receipts which includes the name of the institution to whom the donation was made, the name of the assessee, and the amount of donation. The registration number of the institution as issued by the Income Tax Department should be specified on the receipt.
When donations are made online, banks issue tax receipts directly to the donee which can be used as a proof for claiming deduction under Section 80GGA.
Difference between Section 80G and Section 80GGA
The following are the differences between Section 80G and Section 80GGA: