Parties take coupon route to bypass I-T dept
However, many regional parties, including the JD(S), had continuously failed to comply with the provision.
Prof Sastry was speaking to reporters after releasing a report of the Association for Democratic Reforms, which has detailed the funds received by three political parties - the Congress, the BJP and the JD(S) - from 2007-08 to 2010-11.
The Congress has shown that of the Rs 1,492.35 crore it has received, Rs 1,171 crore is through sale of the party’s coupons. The BJP and the JD(S) have not declared that they follow the coupon system.
The share of donations in the total income is 83.75 per cent for the BJP, while the Congress has shown that the share of donations in the total income is a mere 12.31 per cent.
In case of the JD(S), it has got 99 per cent of its total income from donations from 2008 to 2011. The JD(S) has not filed its I-T returns for 2008-09 and 2010-11. As per the I-T Act, political parties are liable to pay tax on their income.
Referring to the Congress’ ‘sale of coupons’, Sastry said the Congress was not being transparent with regard to coupons. “The parties are not revealing their sources fully, which is nothing but getting around the law.
Any source of income, especially if it is donations above Rs 20,000 must be revealed. Also, there is no uniformity in the classification of expenses,” he said.
Sources in the BJP said that they too sold coupons. This is a practice followed by all parties to hoodwink the I-T department. Any company or individual donating more than Rs 10,000, comes under the tax net.
To avoid paying tax, donors buy coupons which is unaccounted for. Receipts are not given for the donations. It is more like raising donations for festivals, sources said.
However, KPCC president G Parameshwara said, “We keep accounts for every rupee we get. Our accounts are audited. We have been selling coupons because we need money to run the party. A lot of money is required to run the offices of the party across the State.”
How is the Congress receiving more donations than the ruling BJP? For this, the Congress chief said that because his party is old, it had more ‘sympathisers’ than other parties. Sastry said the objective behind making the report public was to educate the public about the kind of people and organisations that are funding political parties.
“We want to raise the voters’ awareness, for they need to start thinking about these issues with the elections nearing. They need to know whether the funding is from reputable or disreputable sources, how the parties maintain their accounts, and make sound decisions while voting,” he said.
Sastry said KWE, with the objective of ensuring clean elections with honest candidates and a good government, had started its voter awareness activities a year in advance and that more such reports would be released. “We are also persuading political parties to be more transparent, accountable and to put up good candidates.”
He said that to ensure that there was financial transparency and accountability on the part of political parties, there must be a strict mechanism with respect to the reporting of financial information.