Why are these returns important?
Association for Democratic Reforms (ADR) and National Election Watch has obtained copies of the Income Tax Returns and Assessment Orders of various political parties through the filing of RTI applications. This was made possible as per the Central Information Commission’s order number CIC/AT/A/2007/01029 & 1263-1270, according to which public authorities (Income Tax Departments) holding Income Tax returns of political parties are directed to make these returns available to an appellant.
These IT returns submitted by political parties do shed some light on the inner party financial working of political parties. It reports the sources of income and the expenses of the parties.
Political Parties receive tax relief under section 13A of the Income Tax Act. Also under sections 29B and 29C of the Representation of the People Act political parties are entitled to accept contributions and these contributions are exempted from tax under section 13A of Income Tax Act. A Contribution Report has details of the contributions received by political parties in amounts greater than Rs. 20,000, is attached by Political Parties along with their Income Tax Returns. Copies of these Contribution Reports are also submitted by Political Parties to the Election Commission of India (ECI) and are available on ECI’s website