Chapter VIIIwas s.80GGC

Section 137 of the Income-tax Act, 2025

Section 137 — Deduction in respect of contributions given by any person to political parties. Successor to s.80GGC of the 1961 Act.

Where this section sits

Section 137 is in Chapter VIII — Deductions to Be Made in Computing Total Income, which runs from section 122 to section 154.

← Section 136 · Section 138 →

What this section does

The section allows an assessee a deduction for the amount contributed during a tax year to a political party registered under section 29A of the Representation of the People Act, 1951, or to an electoral trust. The contribution must be made otherwise than by way of cash. Two classes of assessee are excluded from the deduction: a local authority, and an artificial juridical person wholly or partly funded by the Government.

Why it is there

Political funding is allowed a deduction but only in a traceable form, so the section bars cash outright rather than capping it. Bodies that are themselves public — a local authority, and an artificial juridical person funded wholly or partly by the Government — are kept out altogether, so that public money is not routed to political parties with a tax benefit attached.

Who it applies to

Any assessee contributing to a registered political party or an electoral trust, other than the two excluded classes
A local authority, which is excluded
An artificial juridical person wholly or partly funded by the Government, which is excluded

What this means in practice

The mode of payment decides the deduction: an amount contributed in cash gets nothing, however well documented, because the words are "other than by way of cash". The recipient must also qualify — a party not registered under section 29A of the Representation of the People Act, 1951 is outside the section, as is any body that is not an electoral trust. The section states no ceiling and no percentage of its own.

An example

Illustrative only, and invented for this page. The figures are chosen to show the rule biting, not taken from any real matter.

A company transfers Rs. 25 lakh by bank transfer to a political party registered under section 29A of the Representation of the People Act, 1951 and pays a further Rs. 2 lakh in cash to the same party. The Rs. 25 lakh is deductible; the Rs. 2 lakh is not. Had a local authority made the same contributions, neither would be deductible.

Where you meet this section

You meet it as a deduction claimed in the return, and in scrutiny where the Assessing Officer tests the mode of payment and the registration status of the recipient before allowing it.

The words themselves

shall be allowed a deduction for the amount contributed by him, other than by way of cash, during a tax year to a political party registered under section 29A of the Representation of the People Act, 1951 (43 of 1951), or an electoral trust

Section 137, Income-tax Act, 2025.

What people get wrong

Claiming a cash contribution. The deduction is confined to amounts contributed other than by way of cash.
Claiming for a party not registered under section 29A of the Representation of the People Act, 1951. Only such a party, or an electoral trust, qualifies.
Assuming every assessee can claim. A local authority and an artificial juridical person wholly or partly funded by the Government are expressly excluded.
Looking for a percentage cap here. The section allows the amount contributed and states no ceiling.

What this replaced

The correspondence is the Income Tax Department’s own, from its comparison utility for the 1961 and 2025 Acts. A renumbering is the easy half; whether the words changed is the half that decides cases.

80GGC - Deduction in respect of contributions given by any person to political parties

See the full 1961 to 2025 concordance.

Case law carried across

Read this before you rely on it. Every decision below was decided under the Income-tax Act, 1961. It appears here because it is tagged to a 1961 provision that the department’s own mapping carries to section 137. That is an inference we have drawn, not a holding on the new section: where the words changed in the move, the reasoning may not survive. Treat this as the place to start looking, not as authority on the 2025 Act.

Explainers

Donating to a political party: the cash bar, and the enquiry that follows tagged s.80GGC
I gave a political party a donation and claimed it under s.80GGC. What can the officer ask, and where does cash fail?

What this page does not tell you. It does not reproduce the section. Everything above was written from the section’s own text as the Income Tax Department publishes it — the text is here, and nothing here is advice on your facts. Where a figure matters, read the sub-section it comes from.