'Govt to allow tax benefits for donations to political parties'
Sheela Bhatt in New Delhi
In a significant move, the National Democratic Alliance government has taken the radical decision of allowing, in principle, tax benefits on donations made to political parties.
While talking to rediff.com, Union Law Minister Arun Jaitley said: "The source of political funding in India remains 'black money'. We (the government) have taken a decision at the Cabinet level to extend income tax incentives, in terms of permissible deductions, for donations made to political parties."
"Any individual or company that makes political donations by cheque will be entitled to tax benefits. We want that more and more people should make donations only by cheques. And all donors will be entitled to deductions," said Jaitley.
The Bharatiya Janata Party-led NDA government has also sought to bolster its bold image by trying to bring in transparency into the entire process of the funding of political parties. The issue had been hanging fire for some time. The government had, however, made its intentions clear over the matter long before the Assembly elections were announced.
The government is also considering the possibility of raising the limit on the income of a political party from voluntary contributions.
Jaitley said that donations to political parties will now need to be audited by auditors approved by the Comptroller and Auditor General of India. The audited reports will be tabled in Parliament.
The minister claimed that the government will not lose any revenue even if large funds are donated to political parties for the sake of tax savings. He said that most of the funds given to political parties hitherto had remained outside the tax net. "I see that as a major cause of the corruption, which can be tackled in this manner. And this government is committed to doing so," he said.
Meanwhile, when contacted, Murli Deora, the Congress party's fund raiser in Mumbai, refused to react on the development "until it is announced officially".
YOU MAY ALSO WANT TO READ:
The Rediff Budget Special
Run-Up To The Budget
Money
