Deduction for any contribution made towards socio – economic welfare either in the form of contribution to scientific research or rural development programmes etc are available to both salaried and self employed individuals under different sections. Hence all individuals who do not have business income can claim deduction under 80GGA and for assessees engaged in any business or profession can claim the same under Section 35.

Deduction under section 80GGA:

The following contributions are eligible for deduction under this section:

• To a research association, university, college or other institution for undertaking of scientific research, social science or statistical research.
• To an association or institution, undertaking of any programme of rural development or for the training of persons for implementing such programmes, provided the assessee furnishes the certificate from such association or institution.
• To National Urban Poverty Eradication Fund or any rural development fund set up and notified by the Central Government.
• 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. Provided that the assessee furnishes the certificate from such public sector company or local authority or, as the case may be.

Deduction is available to the extent of contribution made in the above stated notified funds. 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 income tax return.

Deduction under section 35:

The following contributions are eligible for deduction under this section:

• To a research association, university, college or other institution for undertaking of scientific research, whether related or unrelated to business – weighted deduction of 175% of actual expenditure from Financial Year 2010-2011.
• To a research association, university, college or other institution for undertaking of social science or statistical research – weighted deduction of 125% of actual expenditure incurred.
• To an association or institution, undertaking of any programme of rural development or for the training of persons for implementing such programmes, provided the assessee furnishes the certificate from such association or institution – deduction for actual expenditure incurred.
• 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. Provided that the assessee furnishes the certificate from such public sector company or local authority or, as the case may be – deduction for actual expenditure incurred.
• To National Urban Poverty Eradication Fund or any rural development fund set up and notified by the Central Government – deduction for actual expenditure incurred.

The deduction under Section 80GGA or Section 35 is available even where after making the contribution to an eligible institution, the approval granted to the institution is withdrawn.

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