The government today announced that if political parties deposit demonetized notes in the account, they wouldn’t have to pay any taxes and nor would they face any investigation from the Income Tax department.
Hasmukh Adhia, the Revenue secretary stated
“If it is a deposit in the account of a political party, they are exempt. But if it is deposited in individual’s account then that information will come into our radar. If the individual is putting money in his own account, then we will get information.”
According to Section 13A of IT Act, 1961, political parties are granted exemption from tax on their income from capital gains, house property as well income from voluntary contributions, which they receive from people.
This was the response given by Adhia, when someone asked him whether investigations are being made on political treasuries and accounts of political parties too.
However, there is a condition to for making these deposits; individual donations that are taken in the form of cash shouldn’t exceed Rs 20,000 and moreover, proper identity proof of the donor is required for the same. Adhia also said that if a single donation above Rs 20,000 has to be made, it must be through bank draft or through the cheque.
Talking about farmers, Adhia said that if they wish to make bank deposits without a PAN card, they need to give a self-declaration which states that their earnings don’t exceed Rs 2.5 lakhs.
If farmers aren’t able to give the declaration, they would have to submit their PAN cards.
