7.5.1. Funding to Political Parties & Electoral Bonds
The Union Budget 2017-18 announced certain reforms to bring transparency in funding to political parties. These included the following:
♤ The maximum amount of cash donation that a political party can receive will be 2000/- from one person.
♤ Political parties will be entitled to receive donations by cheque or digital mode from their donors.
♤ An amendment is being proposed to the Reserve Bank of India Act to enable the issuance of electoral bonds (India will be the first country in the world) in accordance with a scheme that the Government of India would frame in this regard.
♤ Every political party would have to file its return within the time prescribed in accordance with the provision of the Income-tax Act.
♤ The existing exemption to the political parties from payment of income-tax would be available only subject to the fulfillment of above conditions.
About Electoral bonds ♤ The bonds will only be issued by a notified bank. Currently, bond denominations of rupees 1000, 10000, 100000, 1 million and 10 million can be purchased through selected branches of SBI. ♤ It could only be bought using cheques or digital payments. ♤ The bonds purchased by donor will be given to a political party for a fixed period of time. ♤ A political party using their notified bank account can convert these bonds into money. ♤ All political parties are required to notify their bank account to the Election Commission. This bond will be like a bearer cheque which will facilitate donor's anonymity. |