EC tightens noose: Parties told to declare even Re 1 in cash donation

However, the party can retain a reasonable amount required for day to day functioning. Also, the parties will forward financial assistance to its candidates for election expenses only through crossed account payee cheque or draft or through bank account transfer, and not in cash.

These guidelines would be applicable from October 1.

EC Under Secretary Malay Mallick has sent the guidelines on ‘transparency and accountability in party funds and election expenditure matter’ recently to the president, general secretary and the treasurer of all the political parties and Chief Electoral Officers of all the states and to the chairman of Central Board of Direct Taxes.

According to EC officials, the political parties had so far been maintaining details such as name and address of only those persons or entities who made donations exceeding Rs 20,000 through account payee cheques or drafts. Political parties, sources in EC said, often prefer cash donations of less than Rs 20,000 while showing the donor as “anonymous” in their account books.

Such donations and donors, thus, evaded coming to notice of Income Tax or any other such government department.

“Now, the political parties will have to maintain details like name and address of every donor irrespective of the amount of donation. These guidelines have been framed to bring transparency and accountability in funding of political parties,” said P K Dash, director general, Election Commission, while talking to The Indian Express. He, however, added that petty sums donated by public during public rallies have been exempted.

The guidelines also maintain parties will have to ensure that no payment in excess of Rs 20,000 is made in a day to any person or company or entity in cash for expenditure.

The account books of the political parties will be audited every year and certified by qualified practising chartered accountants. All parties shall submit to the EC or to such authority, a copy of the audited annual accounts with Auditor’s report for each fiscal, before October 31 of each year.

The EC has formulated these guidelines, after seeking comments and suggestions from all recognised political parties after receiving concerns from various quarters that money power is disturbing the level playing and vitiating the purity of elections.