CBDT Clarification on Fake News Related to Exemption to Political Parties
CBDT Clarification on Fake News Related to Exemption to Political Parties. CBDT Clarification of Status of Political Parties under Income Tax Act, 1961. Reports on Privilege to political parties are false & misleading. Check more details about this news from below….
Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes
New Delhi, 17th December 2016.
Sub: Clarification of Status of Political Parties under Income Tax Act, 1961
There have been some newspaper reports which seem to wrongly suggest that there cannot be any scrutiny of Income-tax returns of political parties registered with the Election Commission in the context of deposits of old currency notes. This inference seems to have been drawn because of the fact that the income of the political parties is exempt from Income -tax under Section 13A.
In this context, the following clarifications need to be kept in mind:
- (i) The exemption from Income-tax is given to only registered political parties subject to certain conditions, which are mentioned in Section 13A, which includes keeping and maintaining books of accounts and other documents as would enable the Assessing Officer to deduce its income therefrom;
- (ii) In respect of each voluntary contribution in excess of Rs.20000, the political party will have to maintain a record of such contributions along with the name and address of such person who has made such contribution;
- (iii) The accounts of each such political party is to be audited by a Chartered Accountant; and
- (iv) The political party has to submit a report to the Election Commission about the donations received within a timeframe prescribed.
There are enough provisions in the Income Tact to scrutinise the accounts of the political parties and these political parties are also subject to other provisions of Income -tax including the filing of return.
(Meenakshi J. Goswami)
Commissioner of Income Tax
(Media and Technical Policy)
Official Spokesperson, CBDT.
Tweets from Dr Hasmukh Adhia- Revenue Secretary, Ministry of Finance, Government of Indiaon the above issue-
- All reports on the alleged Privilege to political parties are false & misleading.
- Political parties have not been granted any exemption or privilege, post demonetisation & introduction of Taxation Amend, Act, 2016.
- Income & Donations of political parties fall in the purview of Sec 13A of the Income Tax Act 1961 & there is no change in its provision
- This is a provision of Law which is more than 35 years old and no change is made in that now.
- Post demonetisation, no political party can accept donations in 500 and 1000 rupee notes since they were rendered illegal tenders.
- If there is any discrepancy, political parties are as liable to be questioned by IT authorities as is anyone else.They enjoy no immunity