Political Parties Tax: Election dates have been announced in the country. All political parties have declared their lists of candidates for the elections. Elections for the 18th Lok Sabha are to be held in seven phases. Meanwhile, a lot of talk is coming about political parties and the donations received by them. The Congress party has accused the Income Tax Department of freezing their accounts for wrong reasons. Let us know today. Do political parties also have to pay? How is tax calculated?
Do political parties have to pay income tax?
Under Section 13A of the Income Tax Act, political parties have been given 100% exemption on income. But for that some important criteria have to be fulfilled. If political parties can be said in one word regarding income tax, it is no. But if they do not fulfill the conditions given in the income tax law, then they have to pay tax. Political parties have been given exemption in income tax.
Political parties cannot do any kind of commercial activity. Nor can she earn profits from such events. If a political party had no income then it would not have to pay taxes. The donations received by the political party are spent for the same purpose. Political parties can deposit the amount received as donation in the bank. Can buy that property. Or she can do some other work related to the party.
This work is necessary under 13A
All political parties are required to register under Section 29A of the Recognized Provident Fund. Along with this, political parties also have to maintain books of account. In which she keeps accounts of all the transactions done. Along with this, political parties receive an amount of more than Rs 200,000 as donation.
It has to be fully accounted for. The name of the person who gave it has to be written and the address also has to be entered. At the time of elections, the party has to give complete reports to the Election Commission and Tax Department. In which all donations above Rs 20,000 have to be mentioned. If political parties fail to give this report. Then they do not get the exemption under Section 13A of Income Tax and political parties have to pay tax on such occasions.
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