Supreme Court dismisses plea seeking taxation of political parties

The executive has the power to grant legislative exemptions to whoever it wants to, the Supreme Court said on Wednesday, refusing to entertain a petition that challenged the basis for keeping political parties out of the Income Tax law’s ambit.

The executive has the power to grant legislative exemptions to whoever it wants to, the Supreme Court said on Wednesday, refusing to entertain a petition that challenged the basis for keeping political parties out of the Income Tax law’s ambit.

The court maintained that if agricultural income can be exempted from the ambit of the Income Tax law, the same can be done for political parties. (PTI file)

“A political party is needed to project the political regime it follows. Each of them need financial support, for which they collect money from the public – so they (electors) can be represented in governance and legislation,” said a bench of Chief Justice JS Khehar and Justice DY Chandrachud.

The public interest petition had also objected to a provision of the election law that introduced the term ‘political party’ for the first time in 1989. The petitioner claimed that as the Constitution does not envisage the phrase ‘political party’ anywhere, introducing those words in the law was unconstitutional. As the Constitution is silent on what comprises a political party, there can be no question of granting it tax exemption, he added.

The court maintained that if agricultural income can be exempted from the ambit of the Income Tax law, the same can be done for political parties. “It’s up to those who govern the country to decide who should be taxed and who should be exempted,” it said, refusing to accept that the law was “deplorable and arbitrary”.

On the argument that independent lawmakers should get similar benefits under the law, it held: “An individual fights for himself, unlike a political party that has to set up an establishment – for which they take money from the public.”