Parties can't accept junked notes in donations; exemption rules unchanged: FM
December 18, 2016 08:55
In a bid to clear the air on tax exemption to political parties, Finance Minister Arun Jaitley has said that they cannot accept donations in old 500 and 1,000 rupee notes since these bills were junked last month and clarified that there is no new exemption granted.
The conditional tax exemptions historically given to income of registered political parties continue and no new concession or exemption has been granted either post November 8 demonetisation announcement or in the last two-and-a-half years, he said.
"Post demonetisation, no political party can accept donations in 500 and 1,000 rupee notes since they were rendered illegal tenders. Any party doing so would be in violation of law," he said in a statement.
He said just like anyone else, political parties can also deposit their cash held in the old currency in banks till December 30 "provided they can satisfactorily explain the source of income and their books of accounts reflect the entries prior to November 8".
"If there is any discrepancy in the books or records of political parties, they are as liable to be questioned by the Income Tax authorities as is anyone else. They enjoy no immunity whatsoever," he said. "There is no question of sparing anyone, and the political class is no exception."
Political parties have not been granted any exemption post demonetisation and introduction of Taxation Laws (Second Amendment) Act, 2016 which came into force on December 15, 2016," he said.
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