I-T Dept Extends Date for Applications by Electoral Trusts
The Income Tax Department today extended the date to November 30 for filing of applications by Electoral Trusts for getting tax benefits on donations given to political parties.
"The Central Board of Direct Taxes (CBDT) has permitted Electoral Trusts to file their applications up to November 30, 2013 in respect of Assessment Year 2014-15 for approval under clause (22AAA) of Section 2 of the Income-tax Act, 1961...," the Finance Ministry said in a statement.
Earlier, the last date for filing applications by such non-profit companies for the next Assessment Year was July 31.
The government notified the Electoral Trusts Scheme earlier this year to streamline the process and bringing in more transparency in the funds provided by corporate entities to the political parties for election-related expenses.
The move was aimed at bringing greater transparency in corporate funding of political parties' poll expenses.
The scheme permitted the entities to register non-profit companies having 'Electoral Trust' as part of their names, thus differentiating them from the companies having other business interests.
As per the scheme, such companies can get tax benefits only if they distribute 95 per cent of total contributions received by them in any financial year to the registered political parties within that year itself.
Besides, they can not receive any contribution in cash and they are required to take the Permanent Account Number of all contributors who are resident Indians, and passport number of non-resident Indian citizens at the time of receiving the contribution.
These Electoral Trust companies are not allowed to accept contributions from foreign citizens or companies.
As per the rules, all donations to political parties should be made only through cheques to get tax benefits.
Many business conglomerates, including Tatas, Aditya Birla group and Bharti Groups, have in the past disclosed having made contributions to different political parties through their trusts.
Economic Times, New Delhi, 17-09-2013