Political Parties And Electoral Trust Flashcards
What types of income are exempt for political parties under Sec 13A?
Income from House Property, Capital Gain, Other sources & Donation
Exempt if specific conditions are satisfied
What conditions must political parties satisfy to have their income exempt under Sec 13A?
Must maintain Books of Alc’s & documents,
Must get its Books of Account audited,
Must keep & maintain record of each voluntary contribution or donation ≥ ₹ 20,000,
Must receive donation > ₹ 2,000 by A/c payee cheque or DD or ECS or Electoral Bonds,
Must file Return of Income upto due date u/s 139(4B)
Donations must be recorded with the donor’s name and address
Is income from Salary taxable for political parties?
Not possible
What is the taxation status of PGBP for political parties?
Fully Taxable
What conditions must be met for a voluntary contribution received by an Electoral Trust to be exempt?
At least 95% or more of aggregate donation of the current year along with surplus b/f from earlier year is distributed to any political party, Functions in accordance with rules made by CG
Both conditions must be satisfied for exemption
What type of income is exempt for Electoral Trusts?
Only Donation Income
Other income like interest on Deposit is fully taxable
List the permitted sources from which contributions can be received by political parties.
- Individual Indian Citizen
- Indian Company
- Resident Firm, HUF, AOP, BOI
Contributions must be received after donor furnishes PAN or Passport No.
List the non-permitted sources from which contributions cannot be received by political parties.
- Individual Non-Indian Citizen
- Any Foreign Entity
- Any other Electoral Trust
- Government Company
- Any Foreign Source
Contributions from these sources are prohibited
What is the maximum percentage of total donation an Electoral Trust may spend for managing its affairs?
5%
Maximum Limit is 5 lakhs for 15 years & 3 lakhs for subsequent years
What is required for contributions to be valid for political parties?
Received only by way of a/c payee cheque, DD, ECS
Contributions must not be utilized for the direct or indirect benefit of members or contributors
What is the form used for auditing the books of account for an Electoral Trust?
Form 10BC
What deductions are available for donations to Political Parties or Electoral Trusts under Sec 80GGB/80GGC?
100% deduction
Deduction is not available on Cash Donation
