TIBS Blog

Can salaried employees claim deduction under Section 80GGA of the Income Tax Act?

Section 80GGA covers the following contributions:

(a) any sum paid by the assessee in the previous year to a university, college or other institution which undertakes scientific research. The university/college/institution should be in the list notified by the Income Tax department.

(b) any sum paid by the assessee in the previous year to an association or institution, which runs programmes for rural development.

(c) any sum paid by the assessee in the previous year to a public sector company or a local authority or to an association or institution approved by the National Committee (please read the tax law to know what National Committee is), for carrying out any eligible project or scheme.

(d) any sum paid by the assessee in the previous year to a rural development fund set up and notified by the Central Government.

(e) any sum paid by the assessee in the previous year to the National Urban Poverty Eradication Fund set up and notified by the Central Government.

Any assessee who does not have income chargeable under the head “Profits and gains of business or profession” can claim deduction under Section 80GGA. Hence, salaried employees who do not have business income can claim deduction under the section.

However, employers while calculating TDS on salary cannot consider deduction under Section 80GGA. Salaried employees can submit information on contributions under Section 80GGA to the Income Tax department while filing their return and seek a tax refund, if applicable.