New CBDT format for poll donations

New CBDT format for poll donations

Aiming to facilitate corporate houses that fund political parties through their electoral trusts, the Central Board of Direct Taxes (CBDT) has provided a format that would allow them to furnish a comprehensive set of details from the number of shareholders to the amount of contribution.

Released on Tuesday, the checklist would highlight the most essential facts firms must provide while filing details about the electoral trust with the Income Tax department.

The format poses questions such as whether the electoral trust is a registered company under section 25 or created solely to distribute funds to political parties.

The scheme allows business entities to register non-profit companies having 'Electoral Trust' in their names, thus differentiating them from the companies having other business interests.

Earlier this year, the government notified the ET scheme to make corporate donations to political parties more transparent.

The scheme requires companies to spend 95 per cent of the total contributions they receive in a given financial year to registered political parties within the same year in order to qualify for tax benefits.

Besides forbidding them from taking cash contributions, the scheme also asks them to note down Permanent Account Numbers of individual donors within India and passport numbers of non-resident Indians. The trusts are not allowed to accept donations from foreign citizens or companies.

Corporate houses in the past have admitted to have donated to political parties through election trusts.

According to Association for Democratic Reforms (ADR) and National Election Watch, between 2004-05 and 2011-12, the Congress, BJP and the NCP received Rs 105.86 crore from six electoral trusts – General Electoral Trust (Aditya Birla Group), Electoral Trust (Tata Sons), Bharti Electoral Trust (Bharti Enterprises), Satya Electoral Trust, Harmony Electoral Trust and Corporate Electoral Trust.

Out of that sum, the Congress received Rs 63.37 crore, the BJP Rs 41.49 crore and the NCP Rs 1 crore. Three other national parties the BSP, CPI and the CPM did not get any donation from these trusts since 2004.

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