Are political parties supposed to file income tax return?
Political parties are exempted from tax on income from donations but they have to maintain a book of account for the same if the amount is more than Rs 20,000/-. The last five year reports have revealed that tax exempted income of thirteen main political parties was found to be Rs 2,490/- crore. RTI activist Manoranjan Roy sought details of income and tax paid by political parties across the country from the Central Board of Direct Taxes (CBDT). The reply from various regional offices of the IT department has revealed that some of the parties are being assessed and that their income from donations is non-taxable. In the state of Maharashtra, Maharashtra Navnirman Sena (MNS) is the only party assessed and is filing income tax returns regularly. The reply also stated that the party has been receiving donations above Rs 20,000/- but as parties are exempted from tax on income from donations under section 13A of the I-T Act, no tax is payable on them. The total income of the Shiromani Akali Dal from the year 2000-01 to 2008-09 has been registered to be nil as per the reply received from the Chandigarh office . On the other the only party which the IT department has asked to pay tax is the Janata Dal (Secular). The department has raised a demand saying the party’s income is from house property, capital gains and other sources. However the assessment is under dispute.