Political parties should keep records of donations over Rs 20,000: Finance Ministry

The directive issued by Finance Ministry stated that political party will now have to maintain records for all contributions exceeding Rs.20000. The political party has to submit a report to Election Commission about donations received within a timeframe prescribed

Political parties should keep records of donations over Rs 20,000: Finance Ministry

Finance Ministry has come with a new directive to all the political parties on voluntary donations. The directive issued by Finance Ministry stated that political party will now have to maintain records for all contributions exceeding Rs.20000.






The Ministry also added that exemption from income tax will be given to registered political parties only. The Ministry added, that such exemptions will remain strictly under the conditions laid down in Sec13A of IT Act, which also covers maintaining books of accounts and other docs, so as to enable IT assessing officer to deduce the income.


Meanwhile, Finance Secretary Ashok Lavasa said on Friday that political parties will be exempted under the Income Tax act to deposit banned Rs 500 and 1000 currency notes in their bank accounts. Currently, parties are only exempted from revealing the the source of donation if it is less than ₹20,000 under the IT act.


Ministry added, it would not conduct any check on the bank deposits of the political parties and thy dont need to declare sources of income if the deposited amount is below ₹20,000.

 The Ministry added that such an income may be derived from house property, other sources, capital gains or any income from voluntary contributions received from any person, reported Times Now channel.


The exemption is applicable without any monetary or other limit and the income so exempted in this way was not even included in the total income of the political party for the purpose of IT assessment.

Ministry clarified that as part of the nation wide crackdown on black money and corruption, government is making attempts to ensure that ordinary citizen's source of income should remain transparent. The aim is to ensure creation of a corruption free society, added officials.