The following incomes derived by a political party are not included in computing its total income:
(i) Income which is chargeable under the head ‘Income from house property’; or
(ii) Income chargeable under the head ‘Income from other sources’.
(iii) Any income by way of voluntary contribution from any person.
(iv) Any income by way of capital gains.
The exemption of the above income shall be available only when the following conditions are satisfied:
(i) the political party keeps and maintains such books of accounts and other documents as will enable the Assessing Officer to properly deduce its income therefrom;
(ii) where the voluntary contributions other than contribution by way of electoral bond from a person exceeds Rs. 20,000, it keeps and maintains a record of such contribution and the name and address of the person who has made such contribution:
In other words, the political parties shall not be required to furnish the name and address of the donors who contribute by way of electoral bond.
(iii) the accounts of the political party are audited by a Chartered Accountant.
(iv) no donation exceeding Rs. 2,000 is received by such political party otherwise than by an account payee cheque drawn on a bank or an account payee bank draft or use of electronic clearing system through a bank account or through such other electronic mode as may be prescribed or through electoral bond.
(v) the treasurer of such political party or any person authorised by the political party in this behalf must submit a report under section 29C (3) of the Representation of People Act. 1951 for the relevant financial year.
Political party for the purpose of this section means a political party registered under section 29A of the Representation of the People Act. 1951.
|If the report under section 29C (3) of the Representation of the People Act, 1951 is not submitted, no exemption under this section shall be available for that political party for such financial year.|
Income of an Electoral Trust shall be exempt [Section 13B]
Any voluntary contribution received by an electoral trust shall be treated as income of the electoral trust. However, such income shall be exempt if the following conditions are satisfied:
(a) The electoral trust distributes to any political party, registered under section 29A of the Representation of the People Act, 1951, during previous year 95% of the aggregate donations received by it during the said previous year along with the surplus, if any, brought forward from any earlier previous year, and
(b) Such electoral trust functions in accordance with the rules made in this regard by the Central Government.
|Meaning of electoral mast: “electoral trust” means a trust so approved by the Board in accordance with the scheme made in this regard by the Central Government. [Section 2(22AAA)]|