A message for the media

No changes in legal and taxation regimes for registered political parties

No tax concession for political parties, clarifies FM Arun Jaitley

NEW DELHI: Union Finance Minister Arun Jaitley today said political parties haven't been granted any exemptions after demonetisation and the introduction of the Taxation Laws (Second Amendment) Act, 2016, which came in force on December 15, 2016."Under Section 13A of IT Act 1961, Political parties have to submit audited accounts, income and expenditure details and balance sheets. Post demonetisation, no political party can accept donations in 500 and 1000 rupee notes since they were rendered illegal tenders. Any party doing so would be in violation of law," Jaitley said in a statement."Just like anyone else, political parties can also deposit their cash held in the old currency in banks till the 30th of December provided they can satisfactorily explain the source of income and their books of accounts reflect the entries prior to 8 November", he explained."If there is any discrepancy in the books or records of political parties, they are as liable to be questioned by the Income Tax authorities as is anyone else. They enjoy no immunity whatsoever."Under the Income Tax Act, income of political parties is exempt from tax subject to condition that all donations above Rs 20,000 are taken through cheques and smaller ones are properly documented with full details of donors. These accounts also have to be audited.The Finance Minister today also had a message for the media."I implore all journalist friends to be fully outraged against any step of the Government, if it is not against corruption. But in equal measure, I would also implore them to do adequate research before jumping the gun," Jaitley explained in his statement.He said income of, and donations made to political parties fall in the purview of Section 13A of the Income Tax Act 1961, and there's no change in its provisions."In this era of instant outrage, a 35-year-old law is presented as a new law being passed by the NDA Government," he said.Jaitley also asked other political parties to follow PM Narendra Modi's lead and ask their MPs and MLAs to submit bank account details from the period that followed the note ban."There is no question of sparing anyone, and the political class is no exception. In fact, PM Modi is setting a new example of propriety in public life, by asking all MPs & MLAs of BJP to submit their bank account details post demonetisation. We would like to urge the other parties to do the same and prove their intentions against corruption."In Mumbai, Jaitley told reporters that "the legal and taxation regimes for all registered political parties remain as they were 20-25 years ago. Our government has not made any changes to these rules, nor we are planning to make any".He warned political parties not to misuse the system. "There is no relaxation in the tax scrutiny of political parties. This is a complete media creation. We will take strong action against those parties which misuse the system."Stating that no changes have been made in the law regarding political funding, he said, "Not a single change has been made in the last two months or so, or in the last two-and-a-half years with regard to taxation of political parties."Nothing has been done, whatever was the existing system which has existed for the last 15 years is continuing and if somebody creates a political party for the purpose of channelising funds... obviously law will step in," Jaitley said.