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Political party should stop accepting Cash Donation

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Political parties has received more than 2000 Crore as donation in cash in last 2 years. Political party should stop accepting cash donation

Prime Minister Narendra Modi announced demonetization of Rs 500 and Rs 1000 currency notes on 8 November 2016, giving major reason as stoppage of black money circulation in the economy. India’s 125 Crore population has gone through the major exercise of depositing all the notes into banking system. The task was painful for individuals, small businessmen and senior citizen as they required to visit bank and stand in queue for hours for depositing old notes and then withdrawing new notes. However every Indian despite facing difficulties has stood by Prime Minister Narendra Modi decision and welcome the step. Majority of Corporates and Foreign Companies has also supported the decision. The major opposition to demonetization was from the political parties as it is seen from their disruption in smooth functioning of parliament and opposing GST bill implementation without any valid reason.

As per Representative of People Act under section 29C, any amount of donation received by political party of more than Rs 20,000/- compulsory details need to be provided to the Election Commission of India, like name of person / Company contributing, address of person or Company, PAN No and Mode of Donation – NEFT / Cheuqe Number. However in case of donation of less than Rs 20,000/- No details or records are required to be maintained.

On basis of above our team did a research on amount of donation received in cash by few national political parties in last 2 years and last 5 years. We were shock to know the amount received in cash is more than 2000 Crore for 7 National Parties in last 2 financial years, 2014-15 and 2013-14 from undisclosed contributors and more than 4000 crore in last 5 years. 

To check party wise details and research report click on the following link

Mahatma Gandhi Quoted “Be the Change you wish to see in the World”. Prime Minister Narendra Modi has always walked the talk and practice what is preached. PM has recently appealed to all citizen for doing cashless transaction and want our economy to go cashless. We all support our PM in his decision. However we felt that the change should start with political party which should stop accepting all cash donation. It would be difficult to say if some political party may be laundering money. An individual can easily convert Black Money in to white by simply creating a political party, and get registered under Representation of People's Act, then donate all black money to your party in parts, each part being less than 20,000, and make infinite such donations. Go to bank, deposit all this amount in the party's account. And lastly withdraw the amount as and when you need.

To stop such misuse, following points to be implemented requiring changes in Income Tax Act and Representative of People Act which can be passed by the parliament in coming in Budget 2017

1) Political party should stop accepting cash donation. In case if cash donation is received then PAN No and Aadhar Card must be compulsory so It will be easy to cross-check with Income Tax Department whether such a person could have made that much of a donation. Then it becomes extremely difficult for political parties to give false names and give donations

2) Individual pays Income Tax @30%, Political parties are exempted from paying Income Tax on the donation and other incomes. Exemption given to income of political party should be removed and all income of political party should be taxed as per slab rates of Income Tax.

3) The person contributing to political party gets exemption from taxation in section 80GG. Exemption should be removed as it is misused by many to by transferring amount to political party account for getting exemption and then receiving in cash amount from the same party. If the exemption is removed it will be an automatic check on fake donation received via transfer entries.

4) Companies provide donation for political funding are exempted from tax under section 80GGB. However the same company is taxed on amount spend on CSR activity. So we propose to remove exemption given to companies on political donation at par with CSR donation.

5) If a political party is not conducting election in last 2 years, the name of such party should be removed from list of political party as per Representative of People Act

6) All Political parties should disclose the cash amount deposited in old Notes of Rs 500 and Rs 1000 in bank accounts during period 8 November 2016 till 31 December 2016 and make it available in public domain.

 

If the above recommendation are implemented there would be major check on money laundering and black money generated by political parties including small regional parties. There are about more than 1000 registered political parties as per Election Commission website. We were not able to do research on all parties.

To avoid above misuse we urge all the people of India to sign the petition and also share with your friends and colleagues through email and social media and any other means. Your signing the petition will help convincing the government to change the legislation.

Yours sincerely,

Team Expertmile

 

For the research methodology we adopted, assumption and to read disclaimer click on the following link

 

Disclaimer: There can be chances of human error while calculating figures as at many audit reports and declaration the total amount was not provided directly and we had to work and collate all the available data. . Author does not take any responsibility for misrepresentation or interpretation of act or rules. Neither the author nor the company accepts any liability for the loss or damage of any kind arising out of information in this document or for any action taken in reliance there on. 

For the research methodology we adopted, assumption and to read disclaimer click on the following link



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