Recently, many taxpayers have received SMS notifications from the Income Tax Department regarding deductions claimed under Section 80GGC. This article aims to clarify the meaning of these messages and guide taxpayers on the appropriate actions to take.
Understanding the SMS Notification:
The Income Tax Department has been sending messages to taxpayers who have claimed deductions under Section 80GGC. The typical content of the message is as follows:
“Dear Taxpayer, please ensure that the deduction claimed under Section 80GGC in your Income Tax Return is genuine and that you have the necessary documentary evidence to support it. Regards, Income Tax Department.”
What is Section 80GGC?
Section 80GGC of the Income Tax Act allows individuals to claim deductions for contributions made to political parties or electoral trusts. The key points to note are:
- Eligibility: Only individual taxpayers can claim this deduction.
- Beneficiaries: Contributions must be made to a registered political party or an electoral trust.
- Mode of Payment: Deductions are allowed only for contributions made through non-cash modes, such as cheques, bank drafts, or electronic transfers.
Why is the Income Tax Department Sending This Message?
The department is emphasizing the importance of ensuring that deductions claimed under Section 80GGC are legitimate. This initiative aims to:
- Prevent Misuse: Deter taxpayers from claiming false deductions.
- Promote Compliance: Encourage taxpayers to maintain proper documentation for deductions claimed.
Actions to Take:
What should taxpayers do?
If you genuinely claimed the deduction: Ensure you have all the necessary supporting documents, such as donation receipts and bank statements, to substantiate your claim. For example, if you donated Rs. 1,00,000 to a registered political party, have the receipts and bank statements ready. Also, ensure that such a political party is genuine.
If the deduction claim is not genuine: Update your ITR by removing the incorrect claim and file an updated return for FY 2021-22 or FY 2022-23, as applicable. Taxpayers can file an updated return within 24 months from the end of the relevant assessment year. For FY 2021-22, the updated ITR can be filed by 31.03.2025. An additional tax of 25% or 50% is applicable on the updated return. For FY 2021-22, the additional tax is 50%, while for FY 2022-23, it is 25%.
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