Deduction in respect of donations for scientific research and rural development [Section 80GGA] :
(i) Section 80GGA grants deduction in respect of the donations made for scientific research or rural development by any assessee not having income chargeable under the head “Profits and gains of business or profession”.
(ii) The following donations would qualify for deduction under this section –
(1) Any sum paid by the assessee in the previous year to a research association which has, as its object, the undertaking of scientific research or to a University, college or other institution to be used for scientific research; and
(2) Any sum paid by the assessee in the previous year to an association or institution which has as its object the undertaking of any programme of rural development to be used for carrying out any programme of rural development approved by the prescribed authority for purposes of section 35CCA or to an institution or association which has as its object the training of persons for implementing programmes of rural development.
It is, however, essential that in respect of both the aforesaid donations, the association or institution to which the donation is given must be approved by the prescribed authority; in the case of donation for scientific research, the donation must be to the institution approved under section 35(1)(ii) whereas in the case of donation for rural development the institution or association must be approved by the prescribed authority under section 35CCA(2).
(3) Any sum paid to a Research Association which has as its object the undertaking of research in social science or statistical research, University, College or other institution to be used for research in social science or statistical research.
Such Research Association, University, College or institution must be approved under section 35(1)(iii).
(4) Any sum paid to a public sector company or a local authority or to an association or institution approved by the National Committee for carrying out any eligible project or scheme.
However, the assessee must furnish a certificate referred to in section 35AC from such public sector company or local authority or association or institution.
The expression “National Committee” and “eligible project or scheme” shall have the meanings respectively assigned to them in the Explanation to section 35AC.
Note – It has been clarified that the deduction to which an assessee is entitled in respect of any sum paid to a Research association, university, college or other institution or to an association or institution for carrying out the programme of rural development, or to a public sector company, or to a local authority or to an association or institution for carrying out the eligible project or scheme referred to in section 35AC, respectively, shall not be denied merely on the ground that subsequent to the payment of such sum by the assessee the approval granted or, as the case may be, the notification has been withdrawn.
(5) Any sum paid to a rural development fund set up and notified under section 35CCA.
(6) Any sum paid by the assessee in the previous year to National Urban Poverty Eradication Fund (NUPEF).
(iii) Restrictions on deduction:
(1) No deduction under this section would be allowed in the case of an assessee whose gross total income includes income which is chargeable under the head “Profits and gains of business or profession.”
(2) Where a deduction under this section is claimed and allowed for any assessment year, deduction shall not be allowed in respect of such payment under any provision of this Act for the same or any other assessment year.
(3) No deduction shall be allowed in respect of donation of any sum exceeding Rs 10,000 unless such sum is paid by any mode other than cash.