If you have donated to a political party under Section 80GGC of the Income Tax Act, 1961, and claimed the same in your income tax return, you may receive a notice from the Income Tax Department. To assist such taxpayers, the Income Tax Department has launched a new feature on the Tax Assist Portal to help respond to notices easily.
What is Section 80GGC?
Under Section 80GGC of the Income Tax Act, any individual (such as a salaried employee, businessperson, etc.) can claim tax exemption for donations made to a recognized political party or electoral trust. This exemption was introduced to increase transparency and promote political funding. However, due to a recent rise in fake claims, the Income Tax Department has become more vigilant and launched this new initiative to prevent misuse.
Got a Notice? Don’t Ignore It
If you’ve received an SMS or email regarding such a claim, do not ignore it. Making false or unverified claims may bring your ITR under scrutiny and attract penalties. Therefore, keep all necessary documents ready, such as receipts and bank payment proof, related to your claim.
New Message from the Income Tax Department
The Income Tax Department said on social media: "Donated under Section 80GGC? Match your claim with facts. Don’t ignore the notice. False claims may lead to scrutiny and penalties."
How to Respond to the Notice?
If you’ve received a notice under Section 158BC of the Income Tax Act, you need to log in to the income tax portal and submit Form ITR-B under the e-Proceeding tab.
What If Your Claim Is Genuine?
According to CA Ashish Neeraj, if your claim is genuine and you have donated to a recognized political party, there is no need to panic. Simply respond to the notice with the correct receipt and bank statement.
What If the Claim Was Mistaken or You Lack Documents?
If you’ve mistakenly made the claim or don’t have supporting proof, you can file an updated return under Form ITR-U as per Section 139(8A). However, this facility is currently available only for the financial years 2023–24 and 2024–25. The facility for FY 2021–22 and 2022–23 will be made available soon on the portal.
Can the Claim Be Withdrawn?
Yes, if you wish, you can withdraw a claim made under Section 80GGC. For this, file an updated return under Section 139(8A) and deposit the due tax. Also, provide proof of this within 7 days to the department.
What Happens If You Ignore the Notice?
If you intentionally ignore the notice, the department can take action against you and impose a penalty of up to 200% of the tax evaded. If you’ve claimed a political donation, recheck your details. Keep proper documentation and respond on time to avoid any scrutiny or penalty.
