Under Section 139(4B) of the Income Tax Act, 1961, political parties in India are mandatorily required to file an Income Tax Return (ITR-7) if their total income (before claiming exemption under Section 13A) exceeds the basic exemption limit.
Who Must File?
- Registered political partiesunder Section 29A of the Representation of the People Act, 1951.
- Chief Executive Officer (CEO)or authorized office-bearer must file the return.
Exemption Condition (Section 13A)
- Income from voluntary contributions, property, capital gains, or other sourcesis tax-exempt if:
- The party submits ITR-7 by the due date.
- Maintains books of accounts(simplified, not full audit unless required).
- Reports donations > ₹20,000(except Electoral Bonds) to the Election Commission under Section 29C of RPA.
- No cash donations > ₹2,000(exemption denied if violated).
Due Date
- 31st Octoberof the assessment year (e.g., 31 October 2025 for FY 2024-25).
- Belated returnscan be filed by 31 December (with penalties).
Penalties for Non-Compliance
- Loss of exemption: Entire income becomes taxable if ITR is not filed.
- Prosecution riskunder Section 277 for false statements.
ITR-7 Filing Requirements
Political parties must disclose:
- Schedule LA: Details of donations (including Electoral Bonds).
- Balance Sheet & Income-Expenditure Statement.
- Audit Report(if income exceeds ₹2.5L before exemptions).
- E-filing with Digital Signature (DSC) is mandatory
