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CS Executive · Tax Laws and Practice · Classification and Tax Incidence on Companies

Which statement about the deduction for contributions to political parties under section 136 of the Income-tax Act, 2025 is correct?

The deduction is available only to an assessee that is an Indian company. Section 136 excludes individuals, firms and other persons, requires the party to be registered under the Representation of the People Act, and denies deduction for cash contributions.

  1. AIt is available to any assessee, including individuals and firms
  2. BIt is available only to an assessee that is an Indian companyCorrect
  3. CIt is available to a company only if the party is registered under the Companies Act, 2013
  4. DIt is available for contributions in cash up to a prescribed limit

Explanation

Section 136(1) restricts the deduction to an assessee being an Indian company. Individuals and firms are not covered by this provision. Registration of the party is under section 29A of the Representation of the People Act, not the Companies Act, and cash contributions are excluded.

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