Election Commission wants a ban on anonymous donations above Rs 2,000 to political parties.
Highlights
- Ban anonymous donations of Rs 2,000 and above to parties: Commission
- Political parties don't pay tax on donations under Rs 20,000
- Parties often accused of manufacturing lists of donors to avoid scrutiny
The Election Commission has urged the government to ban anonymous contributions of Rs 2,000 and above made to political parties to curb the use of unaccounted or 'black' money during polls.
A decades-old law exempts parties from taxes on income generated from a group of sources including donations by volunteers.
Election Commission officials and others have repeatedly highlighted that black money plays a huge role in elections and that parties attribute disproportionate parts of their funds to donations from volunteers.
According to the proposed amendment, sent to the government as part of a series of reforms, the Commission said it seeks to prohibit "anonymous contributions above or equal to the amount of Rs 2,000".
The Commission has also proposed that exemption of Income Tax should only be extended to political parties that contest elections and win seats in Lok Sabha or assembly polls.
Under the current law, contributions of up to 20,000 do not have to be accompanied by details of the giver, providing a major loophole to parties. Parties are regularly accused of manufacturing lists of small volunteer donors to escape the scrutiny of tax officials.
The government said this week that the 500- and 1,000-rupee notes that were abolished last month can be deposited by political parties till December 30 in their bank accounts
without having to pay any tax.
But the donations will need to be smaller than Rs 20,000 and parties
can be called upon to explain volunteer donations with details of the contributors, the Finance Ministry added.
No new donations can be accepted in the old notes after November 8, Finance Minister Arun Jaitley said.
(With inputs from PTI)