Poll panel wants to end tax breaks for bogus political outfits
15 December 2016
The Election Commission of India (ECI) has decided to ask the Central Board of Direct Taxes (CBDT) to see to it that those political parties which are struck off from its list of recognised outfits should not be given tax exemption as an interim arrangement.
The Chief Election Commissioner (CEC) has taken a decision to communicate to the CBDT that those ''non-serious'' political outfits, which are registered with ECI as parties but have not contested elections since their coming into being, should not be given exemption under Income Tax Act 1961.
There are over 1,900 registered political parties in the country of which barely 400 contested elections between 2005 and 2015. "Thus a majority of them are used as conduits for siphoning off black money."
Section 13A of the Income Tax Act, 1961 confers tax-exemption to political parties for income from house property, income by way of voluntary contributions, income from capital gains and income from other sources.
The ECI in a communication to the law & justice ministry too had argued in favour of amending the Income Tax Act of 1961 in way that "exemption should be made applicable only to political parties that contest elections and win seat(s) in the Parliament or Legislative Assemblies."