New Delhi: Clarifying on reports that the government cannot scrutinise tax returns of political parties, CBDT on Saturday said that there are enough provisions in the Income Tax Act to scrutinise those accounts.
Referring to news reports that income tax returns of political parties registered with Election Commission cannot be scrutinised with regard to deposit of demonetised currency notes, the ministry, in a statement, said: "There are enough provisions in the Income Tax Act to scrutinise the accounts of the political parties and these political parties are also subject to other provisions of Income-Tax, including filing of returns."
Enough provisions in IT Act to scrutinise A/c. of political parties; Parties also subject to other provisions, including filing of ITR (6/N)
— Ministry of Finance (@FinMinIndia) December 17, 2016
Revenue Secretary Hasmukh Adhia had said yesterday that the government is not tinkering with the tax exemption available to political parties and they are free to deposit old 500 and 1000 rupee notes in their bank accounts. But these deposits will, however, be subject to the condition that individual donations taken in cash do not exceed Rs 20,000 and are properly documented with full identity of the donor.
Know the key highlights of CBDT clarifications
- 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;
-In respect of each voluntary contribution in excess of Rs. 20000, 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;
-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 timeframe prescribed.
-There are enough provisions in the Income Tax Act 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.