Congress alleges income tax evasion scam through unrecognised political parties

The Congress on Wednesday attacked the Modi Government, alleging a Rs 10,000 crore income tax evasion “scam” involving unrecognised political parties and demanded a Joint Parliamentary Committee (JPC) probe into it.

There was no immediate reaction from the Government to the allegations.

Congress general secretary in-charge communications Jairam Ramesh asked who was the “Chanakya” behind the 3,260 “sham political parties” and who was the “true mastermind” of the alleged scam.

“The Modi Government must answer to the nation,” Ramesh said in a post in Hindi on X.

“Prime Minister (Narendra Modi), you failed to bring back black money from abroad, and citizens have yet to receive the promised Rs 15 lakh each; yet, it now appears that a scheme to launder black money —turning it ‘white’ — is underway right here in the country under the BJP’s patronage,” he said.

Ramesh asked why, despite cases of tax evasion and money laundering through fake political parties coming to light, the Government had not taken action against the alleged tax evaders and such parties.

He said Congress colleague Shaktisinh Gohil had questioned the Government’s failure to impose 200 per cent penalties and initiate criminal proceedings against those guilty, despite the alleged revelation of tax evasion exceeding Rs 10,000 crore involving 3,260 Registered Unrecognised Political Parties (RUPPs).

“We recall how, just before the 2024 Lok Sabha elections, the Congress party -- India’s principal opposition — had its bank accounts frozen and was slapped with massive tax notices in a highly undemocratic move aimed at financially crippling the party,” Ramesh said. “So, why is there no investigation into these 3,260 sham political parties and the associated cases of tax evasion?” he asked.

“Is it because these fraudulent parties enjoyed the patronage of the BJP leadership and were orchestrating this entire scam with the Government’s tacit approval?” he alleged.

Addressing a press conference, Gohil claimed that there were 3,260 Registered Unrecognised Political Parties (RUPPs) in the country being used to evade income tax.

He said Section 80GGC of the Income Tax Act states that if an individual donates the amount they owe in income tax to a political party, it becomes zero, while the other section, 80GGD, states that if a company donates its tax money to any registered political party, its tax also becomes zero.

“The scam now is that these 3,260 RUPPs have collected donations worth around Rs 10,000 crore,” he alleged. Gohil said that when an NGO report came out in 2025, it was the Government’s responsibility to take action, but no action was taken. He said the Government had stated that donations to those found guilty should be rejected and they should not be given any benefits from them.

“Whereas, according to the law, against those committing fraud, a 200 per cent penalty should be imposed on fake companies; criminal cases should be filed against them, and upon being found guilty, they should face seven years in jail. But in this case, no action has been taken against even a single person yet,” Gohil said.

He alleged that chartered accountants had a major role in tax evasion scams and said income tax officers had explicitly stated that action should be taken against such CAs. “But no orders for any such action have come from ‘above’, because these are their own ‘C team’. The Income Tax Appellate Tribunal has said that such tax evasion is fatal for the country. This black money will weaken the country’s economy and security,” Gohil said. He alleged that the Modi Government was shielding its “own people” from action.

Gohil said the Election Commission had guidelines on transparency and accountability in political funding and that election officers in every state were responsible for scrutinising donations and expenditures of political parties.

He also questioned whether the Election Commission was “in collusion with the BJP”, while noting that such a question had never previously been raised against the poll panel as it was an autonomous body. “Previously, the appointment of the CEC was done jointly by the Prime Minister, the Leader of the Opposition, and the Chief Justice of India,” he said.

“Narendra Modi removed the Chief Justice of India from the CEC appointment process and replaced them with another central minister, who is Amit Shah.

 Now, Narendra Modi and Amit Shah will jointly appoint as CEC only those who obey their word,” he alleged.

Listing the Congress’ demands, Gohil said the alleged tax evasion “scam” should be investigated by a JPC. He demanded that a 200 per cent penalty be imposed under Section 270A (9) and Section 2A of the Income Tax Act.

Gohil also demanded that criminal cases be filed against chartered accountants involved in the alleged scam under Sections 276C(1) and 277, and that their licences be revoked if they were found guilty.

He further demanded criminal cases against the leaders of the alleged fake political parties.

“The Government should keep all information related to donations given in elections in the public domain, so that the public can access this information,” he said.

Gohil also demanded that details be made public on how many people associated with the alleged fake political parties later joined the BJP.