Political Parties cannot receive donation above Rs. 2,000 in cash from one person; entitled to receive donations by cheque or digital mode from their donors;. Have to file its Income-Tax Return within the prescribed time limit
Bisheshwar Mishra /New Delhi
In a path-breaking move the Union Finance Minister Arun Jaitley today announced in his budget speech that he intended to put a brake on the unaccounted cash money which flows in as donation to all political parties. Presenting the General Budget 2017-18, Jaitley said that political parties will not be allowed to receive donation more than Rs 2,000 in cash from one person.
Pointing out that attempts made in the past to rein-in the role of unaccounted funding of political parties had not succeeded, the finance minister said the present government proposes steps that would ensure transparency in donations made to political parties. However, political parties will be entitled to receive donations by cheque or digital mode from their donors, he said and added that government proposed that banks will issue Electoral Bonds to enable donations to political parties.
Jaitley further stressed that every political party will have to file its Income-Tax Return within the prescribed time limit In order to cleanse the system of funding of political parties, donations made to political parties would soon be made by purchasing electoral bonds from authorized banks. The Finance Minister said that the Government will soon frame a Scheme in this regard and an amendment is being proposed to the Reserve Bank of India Act to enable the issuance of electoral bonds. He said that a donor could purchase bonds from authorised banks against cheque and digital payments only. These bonds shall be redeemable in the designated account of a registered political party within the prescribed time limit from issuance of bond.
The Finance Minister said that these steps have been proposed as the political funding for elections couldn’t become transparent though attempts were made to cleanse the system. Despite amendment to the Representation of Peoples’ Act, the Companies Act and the Income Tax Act to incentivise political donations by individuals, partnership firms, HUFs and companies, political parties continue to receive most of their funds through anonymous donations which are shown in cash. He said that the situation has only marginally improved since the provisions were introduced, such as granting exemption from payment of tax to both the donor and the donee, provided a list of donors is maintained, who had contributed more than Rs. 20,000.