Any of the following incomes of a political party received by it from any person shall not be included in its total income of the previous year, on fulfillment of prescribed conditions:

Income from House Property; or

Income from Other Sources; or

Capital Gains

Income by way of Voluntary Contributions (Donations); or

Conditions: –

1. If such political party keeps and maintains such books of accounts and other documents as would enable the assessing officer to properly deduce the income therefrom;

2. In respect of each such voluntary contribution [other than contribution by way of electoral bond] in excess of twenty thousand rupees, such political party keeps and maintains a record of such contribution and the name and address of the person who has made such contribution;

3. The accounts of such political party should be audited by the Chartered Accountant;

4. The said political party should receive any donation in excess of Rs 2,000 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 electoral bond.

Taxation of Political Parties

Note:

1. No exemption shall be available for a financial year, if political party:

    • Failed to submit a report under section 29 C of the Representation of the People Act for a financial year;
    • Does not furnish a return of income for the previous year in accordance with provisions of section 139(4B) or before the due date under section 139(1).

2. If a person makes a donation to political party, then he shall get deduction under section 80GGB/80GGC from his total income of the donation so made. However, no deduction shall be allowed under section 80GGB/80GGC in respect of donations made in cash.

3. Political parties shall not be required to furnish the name and address of donors who contribute by way of electoral bond.

Author Bio

Qualification: CA in Practice
Company: Oswal & Heda Chartered Accountants
Location: Pune, Maharashtra, India
Member Since: 27 Mar 2021 | Total Posts: 16
Anubhav has over 5 years of professional experience in handling Audit & Assurance of various entities, Direct & Indirect Tax Advisory services, Project financing, Litigation Services, RERA, Preparation and Finalization of Income Tax returns, Monthly Compliance which includes GST, TDS and oth View Full Profile

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