Deposits of old notes made in bank accounts of political parties exempt from tax: Revenue secretary
Regularly filed I-T returns and documented records of their income grant them relief from the restrictions of demonetisation, Hasmukh Adhia said.
Political parties are exempted from restrictions on depositing old currency notes in their bank accounts, Revenue Secretary Hasmukh Adhia announced on Friday. The development ensures that these outfits will not come under the Income Tax Department’s scanner, provided they comply with certain rules, PTI reported.
The exemption provision, under Section 13A of the Income Tax Act, provides relief to political parties on the condition that they have been filing their income tax returns annually. The exempted income includes funds from house property, capital gains and voluntary contributions. Political entities are eligible for this exemption if records of this income have been documented and audited by a chartered accountant.
“If it is a deposit in the account of a political party, they are exempted. If the deposits are made in an individual’s account, that information will come under our radar,” Adhia said, adding that demonetisation withdrawal limits will be reconsidered after December 30.
The Centre on Friday also announced the Prime Minister’s Garib Kalyan Yojana – a new scheme for tax defaulters to declare their unaccounted for income between December 17 and March 31, 2017. “The disclosures will attract 50% tax and penalty,” Adhia said.
The Narendra Modi government has come under fire for its demonetisation drive, launched on November 8. The prime minister had announced that Rs 500 and Rs 1,000 notes, which accounted for 86% of the currency in the country, would no longer be legal tender, adding that the move was an attempt to weed out black money and corruption from India.
Addendum: On Sunday, December 18, Revenue Secretary Hasmukh Adhia claimed he had been misquoted and that there were no new exemptions for political parties with regard to old notes.
