The Election Commission has recommended limiting cash donations to a political party to Rs 20 crore or at 20% of its total contribution, whichever is the lower amount. Seeking changes to election and income tax laws, it has proposed amendments to the Representation of the People Act to promote cashless funding of parties, The Indian Express reported on Sunday.
The polling monitor made the suggestions in a letter to the Law Ministry written about two weeks ago. It has also recommended extended the income tax exemption granted to voluntary donations to all donations made through cheques and wire transfers. This can be brought in through an amendment to the Income Tax Act. The EC also wants the tax exemption to be limited to Rs 20 crore, or 20% of the total contributions received by a party, the lower amount of the two.
Seeking another change, the commission wants an amendment to the Conduct of Election Rules to make it compulsory for candidates to meet all election expenses over Rs 2,000 through cheques or online transfers.
These suggestions come soon after the Centre accepted the Election Commission’s recommendation to lower the cap on anonymous cash donations to political parties to Rs 2,000 from Rs 20,000 per person. Its call for cashless donations comes after activists pointed out that parties could bypass this lowered limit by opting for multiple receipts of Rs 1,999 each.
A report compiled by the Association for Democratic Reforms in January had found that political parties had received Rs 7,833 crore, or 69% of their total income, from undisclosed sources in 11 years till 2015. The Congress (83% of its total income) and the Bharatiya Janata Party (65% of its total income) got maximum funds from anonymous sources.