Income tax exemption given only to registered political parties subject to certain conditions: CBDT
After the government announced that political parties depositing old notes post demonetisation will be exempted from income tax, the CBDT issued a clarification on Saturday stating that the exemption from income tax is given to only registered political parties subject to certain conditions which are mentioned in section 13A.
CBDT in an e-mail statement sent to media organisations said, “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.”
Section 13A of the Income Tax Act, 1961 grants exemption from tax to political parties in respect of their income, according to PTI report. This income could be from house property, other sources, capital gains and income by way of voluntary contributions received from any person, it added.
"If it is a deposit in the account of a political party, they are exempt. But if it is deposited in individual's account then that information will come into our radar. If the individual is putting money in his own account, then we will get information," PTI had reported on Friday quoting Revenue Secretary Hasmukh Adhia as saying to reporters.
“In respect of each voluntary contribution in excess of Rs 20, 000, 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,” Central Board of Direct Taxes (CBDT) commissioner of income tax Meenakshi J Goswami, said in a statement.
The accounts of each such political party is to be audited by a Chartered Accountant; and the political party has to submit a report to the Election Commission about the donations received within a time-frame prescribed, cited the statement.
Goswami further said, “There are enough provisions in the Income Tax to scrutinise the accounts of the political parties and these political parties are also subject to other provisions of Income tax including filing of return.”
Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.