The Election Commission on Sunday called for an amendment in legislation to ban anonymous contributions of Rs 2,000 and above to political parties, in a bid to crackdown on black money used during elections in the country, PTI reported. The development follows Finance Minister Arun Jaitley’s statement that political parties would not be granted any exemption from income tax scrutiny on their deposits made after demonetisation.
While there is no constitutional provision against anonymous donations to political parties, there is an “indirect partial ban” on anonymous funding based on a condition that a declaration of donations be provided for funds above Rs 20,000. This is specified under Section 29C of the Representation of the People Act, 1951. A proposal by the commission says that “anonymous contributions above or equal to the amount of rupees two thousand should be prohibited”.
On Friday, Revenue Secretary Hasmukh Adhia had announced that the political parties were exempted from restrictions on depositing old currency notes in their bank accounts. This would essentially ensure that these outfits will not come under I-T scanner, provided they comply with certain rules. However, Jaitley denied these reports, calling them a “media creation”. “There is no relaxation in the tax scrutiny of political parties. This is a complete media creation. We will take strong action against those parties which misuse the system,” the finance minister said.
On November 8, the Narendra Modi government had declared Rs 500 and Rs 1,000 currency notes illegal tender in India. The prime minister had said that the decision was made to fight black money, corruption and currency counterfeiting.