A day after proposing landmark changes in political party funding to increase transparency, the Government is now set to amend the Representation of People Act to keep identity of people using electoral bonds for donations to political parties confidential.
“Donations to political parties via electoral bonds will be confidential, donor's identity not to be disclosed, the Revenue Secretary, Hasmukh Adhia told media on Thursday.
He added, “Finance Bill will amend Representation of People Act to keep identity of donors using electoral bonds confidential.”
“Political parties have to file audited returns by Dec every year or risk losing tax exemptions,” Adhia remarked.
Read | Govt sets political funding limit at Rs 2000 from one source to ensure transparency
In Budget 2017, Finance Minister Arun Jaitley proposed that political parties can receive only up to Rs 2000 in cash donations per source as part of a major move proposed in the Budget to cleanse the electoral system of black money.
Announcing this, Finance Minister Arun Jaitley said political parties will be entitled to receive donations by cheque or digital mode from their donors.
As of now, the limit to accept political donations in cash is Rs 20,000.
Read | Jaitley put political funding under scanner, cash donation to parties capped at Rs 2k; Sitaram Yechury calls it hogwash
“As an additional step, an amendment is being proposed to the Reserve Bank of India Act to enable the issuance of electoral bonds in accordance with a scheme that the government would frame in this regard,” he said in the Lok Saha.
Under the scheme, a donor could purchase bonds from authorised banks against cheque and digital payments only. They will be redeemable only in the designated account of a registered political party. These bonds will be redeemable within the prescribed time limit from issuance of bond.
The proposal said every political party would have to file its return within the time prescribed in accordance with the provision of the Income Tax Act.
“Needless to say that the existing exemption to the political parties from payment of income tax would be available only subject to the fulfilment of these conditions. This reform will bring about greater transparency and accountability in political funding, while preventing future generation of black money,” said Jaitley.