Tax exemption to parties: Rs. 1,033 crore

Are political parties required to reveal the source of their funding under the Right to Information Act? While the CPI agreed to disclose its funding to an NGO, other parties have flatly refused to do so. Chetan Chauhan reports. Money matters

Updated on: Sep 25, 2012, 07:50:15 IST

Hindustan Times | By Chetan Chauhan, New Delhi

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Are political parties required to reveal the source of their funding under the Right to Information Act? While the CPI agreed to disclose its funding to an NGO, other parties have flatly refused to do so.

Association for Democratic Rights (ADR), sought the information under RTI, claiming that political parties are covered under RTI since they get huge tax exemption from the government.

Four major political parties in India have got Rs. 1,033 crore from the government in form of income tax exemption, replies received from the income tax department under the transparency law has revealed.

ADR then filed RTIs with the major political parties seeking information regarding source of their funding in a bid to bring transparency in the Indian political system. The NGO claimed that since the parties were receiving income tax exemption they were public authorities as per definition of the Right To Information (RTI) Act.

The Communist Party of India agreed with ADR. “CPI is a public authority as the organization is substantially financed directly or indirectly by government funds,” party general secretary A B Bardhan told ADR, while providing details of the party funding. CPI also said it has an appellate authority as required under the RTI Act.

Other political parties disagreed.

Congress treasurer Motilal Vohra in a letter to ADR said the party does not come under RTI, while returning the RTI letter with the postal order. The Nationalist Congress Party (NCP) said it didn't have enough man-power to provide the information sought. The BJP and BSP did not respond to the RTI applications.

Taking tax exemption amounts to substantial indirect funding from the government, a ground enough to declare an organization ‘public authority’ under the RTI law.

Punjab and Haryana High Court had declared Punjab Cricket Association, a private body, as a public authority under the RTI law for availing exemption of the entertainment tax. Similarly, Punjab State Information Commission declared Christian Medical College Ludhiana as a public authority for seeking exemption from paying income tax.

“I don’t understand why the political parties are not willing to share information on their funding,” said Anil Bairwal, national coordinator of ADR.

Data compiled by ADR shows that the Congress maximum income tax exemption of Rs. 557 crore between 2006-07 and 2010-11 followed by BJP (Rs. 282 crore) and BSP 97 crore.

The political parties are exempted from paying any income tax under section 13 (A) of the Income Tax Act on the ground that the money is being used for “benefit of public”. Apart from tax exemption, the parties have also got prime property in Lutyens Delhi for their offices, for which they have to pay a nominal rent.

The ADR has now filed an appeal with the information watchdog, the Central Information Commission, against rejection of its RTI application by the political parties. Considering the wider ramification of the appeal, the full bench of the CIC is expected to hear the case on Wednesday.

ABOUT THE AUTHOR
Chetan Chauhan
Chetan Chauhan is the National Affairs Editor looking into all aspects of news and features from across India. A Chevening scholar with over three decades of experience in reporting and news management, Chetan has extensively covered all important aspects of the social sector, political economy, environment and climate change nationally and internationally. He did a journalism course at the Reuters Institute of Journalism in Oxford and Digital Media training at Nanyang Technological University in Singapore. He started as a reporter with The Statesman in 1996 and joined the Hindustan Times in 2000 in the metro bureau covering environment, crime and Delhi politics. He covered hot local news, from the Jessica Lal murder case to the rebellion of Delhi Congress MLAs against then Chief Minister Sheila Dikshit, to the replacement of toxic vehicle fuel with cleaner compressed natural gas (CNG) in the national capital. Some of his stories on air pollution became part of the Supreme Court’s landmark MC Mehta versus Government of India case in the National Capital Region (NCR), forcing the government to take corrective measures. As part of the national political bureau since 2004, he covered important central sectors such as environment, education, social justice, labour, rural development, water resources, renewable energy, agriculture, broadcasting and the Planning Commission for more than a decade producing several exclusive and investigative breaking stories. His specialisation is the environment, having covered at least a dozen United Nations global conferences on climate change, biodiversity and wildlife including climate summits in Paris, Copenhagen and Bali. He also covered India’s two five-year plans ---11th and 12th and reported on drafting and execution of right based laws such as Right to Education, Right to Information and rural job guarantee law, MG-NREGA, now being introduced in new format as VG-RAM-G Act. He has in-depth knowledge of social sector issues. He was one of the first to report on tigers vanishing from Sariska and Panna wildlife reserves in 2004 and 2008, respectively, leading to the setting up of the National Tiger Conservation Authority (NTCA) and the introduction of stringent penal provisions for poaching. He has written extensively on the rising human-animal conflict in India and the degradation of India’s biodiversity hotspots because of mining and other activities. Since 2004, Chetan has covered Parliament comprehensively and participated in training on the nuanced coverage of Parliament proceedings. He has travelled extensively across India to cover national and provincial elections since 1998, especially in the Hindi heartland states, considered India’s road to power. He writes a regular column for Hindustan Times, Ecostani, on important national politics, economy, Himalayan ecology and environmental issues. His other responsibilities include providing inputs for edits and edit page articles for the publication, apart from managing news flow from across India.Read More

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