No I-T exemption for political parties on donations, says FM Jaitley
Finance minister Arun Jaitley on Saturday declared that political parties were as liable to be questioned by income tax authorities as anyone else and they enjoyed no immunity whatsoever.india Updated: Dec 18, 2016 01:29 IST
Finance minister Arun Jaitley on Saturday declared that political parties were as liable to be questioned by income tax authorities as anyone else and they enjoyed no immunity whatsoever.
“There is no question of sparing anyone, and the political class is no exception,” Jaitley said, responding to a barrage of criticism on social media and elsewhere. “In this era of instant outrage, a 35-year-old law is presented as a new law being passed by the NDA government.”
Jaitley’s “clarification” came after reports that political parties were free to deposit old demonetised notes as long as they produced receipts of cash donations less than Rs 20,000.
The minister said the government had not granted political parties any exemption post demonetisation. Income and donations of political parties fall in the purview of Section 13A of the Income Tax Act, 1961. “There is no change in its provisions,” he said.
No political party can accept donations in Rs 500 and Rs 1,000 notes after November 9. “Any party doing so would be in violation of law,” he said. Parties could deposit their cash in old currency provided they could explain the source of income and their books of accounts reflect the entries prior to November 9.
Political parties also have to submit audited accounts, income and expenditure details, and balance sheets. And IT sleuths are free to question them if there is any discrepancy in their books or records.
Jaitley also asked other parties to emulate PM Narendra Modi. Modi had earlier asked all party MPs and MLAs to submit their bank account details post-demonetisation. In doing so, Jaitley said Modi “had set a new example of propriety in public life”.
The statement, however, did not address the larger concerns about gaps in law. Many, however, believe that the existing law does leave some holes.
For one, the election commission has already asked the government to withdraw tax exemption to registered parties if they don’t contest polls. There are 1,900 registered parties in India but only 400-500 of them have contested elections over the past decade.