TIL Desk/National/New Delhi/ After capping anonymous cash donations to political parties at Rs 2,000, the government is amending law to make it mandatory for them to file returns on income by December every year or risk losing tax exemption status. It is also changing the law to keep the identity of the donor confidential who buys the just-introduced electoral bonds from banks to make such donations.
Revenue Secretary Hasmukh Adhia said political parties as per law enjoy exemption from payment of income tax, but half of them do not file income tax returns (ITR) on time. To promote transparency in political funding, the Budget for 2017-18 seeks to amend law through the Finance Bill by making it mandatory for them to file returns by December end for any assessment year. For example, for assessment year 2018-19 (fiscal year beginning April 1, 2017), returns will have to be filed by December 31, 2018.
“They (political parties) will lose the exemption status if they do not file ITR by December-end. We will give a notice and cancel their exemption status. Through this, strictest discipline will come. Our experience is, for last two years, more than 50 per cent parties are not filing ITR on time. These are smaller parties which do not bother to file returns,” Adhia said.
