Income Tax Department Cracks Down on Dubious Political Donation Claims Under Section 80GGC

The Income Tax Department is intensifying its scrutiny of tax deductions claimed for political donations under Section 80GGC of the Income Tax Act. The department has initiated a focused review after noticing a pattern of dubious claims, particularly from salaried professionals and business owners. Taxpayers are reportedly receiving notices asking for documentary proof of their donations, including bank statements and official receipts from registered political parties. This crackdown is part of a larger data-driven effort to curb tax evasion and enhance transparency in political funding. Authorities have observed instances where deductions were claimed for contributions made in cash, which is not permissible, or to unrecognized entities. Taxpayers with ineligible claims are being encouraged to file updated returns to avoid stringent penalties, which can range from 100% to 300% of the tax evaded.