Cap donations from unnamed sources at 2,000, says EC | India News

NEW DELHI: The Election Commission has asked the government to amend the Representation of the People Act (RP Act) to lower the threshold for anonymous donations to political parties to 2,000 from the existing 20,000.

Though the Finance Act 2017 had amended the Income-Tax Act, 1961, to debar political parties from receiving donations above 2,000 by cash, the lower limit prescribed in Section 29(C) of the RP Act for parties to declare their contributions to the EC is still 20,000.

In a letter to the secretary, legislative department the EC pointed out that while an amendment had been made in Section 13A of the I-T Act, whereby, no donation exceeding 2,000 can be received by a political party otherwise than by an account payee cheque or an account payee bank draft or use of electronic clearing system through a bank account or through electoral bond, the limit for receipt of anonymous donations by parties continues to be 20,000 as per Section 29C of RP Act, 1951.

“The RP Act needs to be amended to reduce the limit of anonymous/cash donations to 2,000 so as to bring these two Acts (I-T Act and R P Act)in consonance with each other,” the poll panel said.

Unless the limit prescribed in Section 29C is revised to 2,000, a party need not declare donations between 2,000 and 20,000 (even though these must be made through the banking system) in its contribution report to be submitted to the EC each financial year.

In the letter, the commission also sought review and modification of amendments made in Section 29C of RP Act to exempt parties from declaring contributions received by way of electoral bonds . The poll watchdog asked the government to reinstate a provision in the Companies Act that required corporates to declare party-wise contributions as part of their profit and loss accounts. It also called for bringing back the limit of 7.5% of average net profit in preceding three years, on corporate donations to parties.