There are enough provisions in the Income Tax Act to scrutinise the accounts of political parties even though their income is tax exempt, the Government said on Saturday. Donations to registered political parties are exempt from income tax subject to certain conditions including audit of accounts and all donations above Rs20,000 taken in tax, the CBDT said.
Clarifying on reports that it cannot scrutinise tax returns of political parties, CBDT said: “There are enough provisions in the Income Tax Act to scrutinise the accounts of the political parties and these political parties are also subject to other provisions of Income -tax including filing of return.”
The exemption from IT is given to only registered political parties subject to certain conditions, which are mentioned in Section 13A of I-T Act, which includes keeping and maintaining books of accounts and other documents as would enable the Assessing Officer to deduce its income therefrom.