Deduction in respect of contributions given by any person to political parties
[Section-137 as per the Income Tax Act, 2025 (this Act) w.e.f. 1st April, 2026.]
An assessee, (other than a local authority and an artificial juridical person wholly or partly funded by the Government), 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, or an electoral trust.
FAQs on Section 137 of Income Tax Act 2025
Who is eligible to claim deduction under Section 137?
Any assessee except a local authority or an artificial juridical person wholly or partly funded by the Government can claim the deduction.
What kind of contributions are eligible for deduction under Section 137?
Only contributions made by any mode other than cash are eligible for deduction.
Are cash donations to political parties allowed as a deduction under Section 137?
No, cash donations are not allowed as a deduction.
Can a local authority claim deduction under Section 137?
No, local authorities are specifically excluded from claiming this deduction.
Are artificial juridical persons funded by the Government eligible for deduction under Section 137?
No, artificial juridical persons wholly or partly funded by the Government are not eligible.
To whom should the contributions be made to claim the deduction?
The contributions must be made to a political party registered under section 29A of the Representation of the People Act, 1951, or to an electoral trust.
What is meant by an ‘electoral trust’ for the purpose of Section 137?
An electoral trust refers to a trust approved for receiving voluntary contributions and distributing them to registered political parties.
Is there a limit on the amount of deduction that can be claimed under Section 137?
The section does not specify any monetary limit; the full amount of eligible contributions is deductible, subject to conditions.
From which assessment year is Section 137 applicable?
Section 137 is applicable from the assessment year beginning on or after 1st April, 2026.
Does the contribution need to be supported by any documentation?
Yes, appropriate documentation such as receipts or confirmations is required to support the non-cash contribution.
Can individuals claim deduction under this section?
Yes, individuals (other than the excluded entities) are eligible to claim the deduction.
Are companies eligible to claim deduction under Section 137?
Yes, companies can claim the deduction provided they are not wholly or partly funded by the Government.
Can contributions to unregistered political parties be claimed under Section 137?
No, only contributions to political parties registered under section 29A of the Representation of the People Act, 1951 are eligible.
What happens if the contribution is made partly in cash and partly by cheque?
Only the portion made other than in cash (e.g., by cheque) is eligible for deduction.
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