Govt plans threshold for parties to enjoy tax exemption: Arun Jaitely

Govt plans threshold for parties to enjoy tax exemption: Arun Jaitely

Wednesday December 21, 2016,

2 min Read

The government plans to set a threshold criteria for political parties to enjoy tax exemptions to check money laundering by outfits that do not contest elections, Finance Minister Arun Jaitley said recently.

Finance Minister Arun Jaitley

He said the Revenue Secretary has been asked to look into the issue in the wake of Election Commission's recommendations in this regard.

Also readGovt allows use of old notes for tax payment under ‘Pradhan Mantri Garib Kalyan Yojana’

Jaitley's remarks at a Times Now event assume significance in the context of the Election Commission's recommendations to the government to amend laws to bar tax exemption to parties that do not contest elections and win seats in Lok Sabha and Assembly polls and to ban anonymous donations above Rs 2,000 to political parties.

I can point out one is invisible donation which Election Commission says is anonymous and the second is when political parties got exemptions. There are about 40/50/60 political parties which effectively contest elections in Centre and the States, (but) you have a large number of political parties which got registered not for contesting election but for availing tax exemption. Now this part is easier to tackle. I have already asked the Revenue Secretary to look into this and therefore we will have to put a threshold criteria so that we are able to eliminate those which are not real political parties but only for money conversion which have come in, Jaitley said.

Also readWhy demonetisation is bound to fail unless this loophole is covered

He said many political parties do not contest elections but only accept donations and convert money.

I have already told the Revenue Department to look at them and therefore some threshold criteria could be fixed and number of these could be eliminated, Jaitley added.

It's only been a day since the government has open the window to reuse the junked Rs 500 and Rs 1,000 notes till December 30 for paying tax on disclosures made under the tax evasion amnesty scheme after the big announcement of demonetisation on November 8.