CHAPTER-HEADS DIVISION A PROVISIONS OF INCOME-TAX ACT APPLICABLE TO DONATIONS TO POLITICAL PARTIES INTRODUCTION 3 TAX BENEFITS TO CORPORATE DONORS ON DONATIONS MADE TO POLITICAL PARTIES 10 TAX BENEFITS TO NON-CORPORATE DONORS ON DONATIONS MADE TO POLITICAL PARTIES 30 EXPENDITURE ON ADVERTISEMENT IN SOUVENIR, BROCHURE, TRACT, PAMPHLET OR THE LIKE PUBLISHED BY A POLITICAL PARTY 46 DO’S AND DON’TS OF MAKING DONATIONS TO POLITICAL PARTIES - CHECKLIST 51 DIVISION B ACCEPTANCE OF DONATIONS BY POLITICAL PARTIES & TAX EXEMPTION TO POLITICAL PARTIES DEFINITION OF POLITICAL PARTY 59 REGISTRATION OF POLITICAL PARTY WITH ECI 60 ENTITLEMENT OF REGISTERED POLITICAL PARTIES TO ACCEPT DONATIONS 64 I-5
I-6 FILING OF REPORT OF CONTRIBUTIONS RECEIVED, BY REGISTERED POLITICAL PARTY 66 SPECIAL PROVISIONS RELATING TO INCOMES OF POLITICAL PARTIES 68 DIVISION C HOW TO HANDLE INCOME TAX NOTICES RECEIVED BY DONORS WITH CASE STUDIES HOW TO HANDLE INCOME-TAX NOTICES RECEIVED BY DONORS OF RUPPs 79 CASE STUDIES: RESPONSE OF DONORS TO NOTICES 88 APPENDICES PRESS NOTE OF ELECTION COMMISSION OF INDIA ON ACTION ON RUPPs 107 ELECTORAL BOND SCHEME, 2018 111 RELEVANT SECTIONS OF INCOME-TAX ACT, 1961 118 RELEVANT SECTION OF COMPANIES ACT, 2013 120 RELEVANT SECTIONS OF REPRESENTATION OF PEOPLE ACT, 1951 122 ELECTION COMMISSION’S ORDER DATED 13-09-2022 REGARDING ENFORCEMENT OF COMPLIANCES IN R/O REGISTERED UNRECOGNIZED POLITICAL PARTIES (RUPPs) 125
I-7 CONTENTS DIVISION A PROVISIONS OF INCOME-TAX ACT APPLICABLE TO DONATIONS TO POLITICAL PARTIES 1 INTRODUCTION 1.0 3 1.1 3 1.2 3 1.2-1 4 1.2-2 5 1.2-3 5 1.2-4 7 1.2-5 9 1.3 9 1.4 9
I-8 2 TAX BENEFITS TO CORPORATE DONORS ON DONATIONS MADE TO POLITICAL PARTIES 2.1 10 2.2 10 2.3 11 2.4 11 2.5 12 2.6 13 2.6-1 15 2.6-2 16 2.6-3 16 2.6 417 2.7 19 2.8 19 2.8-1 21 2.8-221 2.8-321
I-9 2.8-4 21 2.8-5 25 2.8-6 25 2.925 2.9-1 26 2.10 27 2.11 27 2.12 27 2.13 ` 28 3
3.1 30 3.230 3.3 31 3.4 31 3.4-1 32 3.5 33 3.5-133 3.5-234 3.6 35 3.7 35
TAX
BENEFITS TO NON-CORPORATE DONORS ON DONATIONS MADE TO POLITICAL PARTIES
I-10 3.7-1 35 3.7-236 3.7-3 40 3.7-4 41 3.7-543 3.8 43 3.9 44 3.10 44 3.11 ` 45 4 EXPENDITURE ON ADVERTISEMENT IN SOUVENIR, BROCHURE, TRACT, PAMPHLET OR THE LIKE PUBLISHED BY A POLITICAL PARTY 4.1 46 4.1-1 46 4.2 47 4.3 47 4.4 47
I-11 4.5 48 4.6 48 4.6-1 48 4.6-2 50 5 DO’S AND DON’TS OF MAKING DONATIONS TO POLITICAL PARTIES - CHECKLIST 5.1 51 5.2 52 5.3 52 5.453 5.5 54 5.6 55 DIVISION B ACCEPTANCE OF DONATIONS BY POLITICAL PARTIES & TAX EXEMPTION TO POLITICAL PARTIES 6 DEFINITION OF POLITICAL PARTY 6.1 59
I-12 7 REGISTRATION OF POLITICAL PARTY WITH ECI 7.1 60 7.2 60 7.3 62 8 ENTITLEMENT OF REGISTERED POLITICAL PARTIES TO ACCEPT DONATIONS 8.1 64 8.264 8.3 65 9 FILING OF REPORT OF CONTRIBUTIONS RECEIVED, BY REGISTERED POLITICAL PARTY 9.1 66 9.2 66 10 SPECIAL PROVISIONS RELATING TO INCOMES OF POLITICAL PARTIES 10.1 68 10.2 68 10.3 70 10.3-171 10.4 73
I-13 DIVISION C HOW TO HANDLE INCOME TAX NOTICES RECEIVED BY DONORS WITH CASE STUDIES 11 HOW TO HANDLE INCOME-TAX NOTICES RECEIVED BY DONORS OF RUPPs 11.1 79 11.2 d 82 11.3 84 11.4 84 12 CASE STUDIES: RESPONSE OF DONORS TO NOTICES 12.1 ` ` ` 88 12.1-1 89 12.1-2 90 12.1-3 92 12.2 93
I-14 12.2-1 94 12.2-2 95 12.2-3 97 12.3 98 APPENDICES APPENDIX 1 107 APPENDIX 2 111 APPENDIX 3 118 APPENDIX 4 120 APPENDIX 5 122 APPENDIX 6 125
Chapter 11
HOW TO HANDLE INCOME-TAX NOTICES
RECEIVED BY DONORS OF RUPPs
11.1 Search on ‘RUPPs group of Ahmedabad’ which unearthed the bogus donation racket
inter alia, S.No. Related Party Name PAN 79
Para 11.1 80 S.No. Related Party Name PANmodus operandi-
81 Para 11.1suo motu-
11.2 Notices u/s 148A(d) sent to donors of 23 RUPPs for AY 2019-20 asking them why reassessment notices should not be issued to them for withdrawing deductions under section 80GGB/80GGC
Para 10.1
Para 11.2 82
bb `
operandi
modus
` `
83 Para 11.2 ` vide -
11.3 Reassessment Notices in standard format appear to have been sent to all donors of 23 RUPPs who claimed deduction u/s 80GGB/80GGC
11.4 How to respond to these SCNs?
Para 11.4 84
i.e.
T.Takano SEBI
At the stage of issuing Show Cause Notice to determine whether any enquiry should be initiated against the noticee, it is sufficient if only the material relied upon by the authority is disclosed.
Ipse dixit85 Para 11.4 -
d e h -