The Supreme Court is set to hear on August 31 a petition contesting the legality of a provision in the Income Tax Act that permits political parties to accept cash donations of less than Rs 2,000.
The Supreme Court’s cause list for August 31 states that the plea is scheduled to be heard by a bench of Justices Vikram Nath and Sandeep Mehta.
On November 24 last year, the apex court had consented to examine the petition and requested replies from the Centre and other concerned parties.
The petition argued that the absence of transparency compromises the integrity of the electoral process by denying voters essential information about the origins of political funding, including the identities of donors and their intentions, thereby hindering their ability to make a rational, informed, and intelligent choice when casting their ballots.
The petition, submitted by Khem Singh Bhati, also requested that the election commission be directed to require, as a condition for registering a political party and assigning its election symbol, that political parties must not accept any funds in cash.
The plea sought the striking down of Clause (d) of Section 13A of the Income Tax Act, 1961, as unconstitutional and also referred to the apex court's 2024 judgement which scrapped the electoral bonds scheme. Section 13A of the Act deals with the special provision relating to the incomes of political parties.
"The petitioner is seeking direction that the political parties must disclose the name and all other particulars of the person paying any amount of money to it, and no amount can be received in cash so as to maintain transparency in the political funding," the plea said.
The petition requested that Clause (d) of Section 13A of the Income Tax Act, 1961 be invalidated as unconstitutional, and cited the Supreme Court’s 2024 ruling that abolished the electoral bonds scheme. Section 13A of the Act contains special provisions governing the income of political parties.
"The petitioner is seeking direction that the political parties must disclose the name and all other particulars of the person paying any amount of money to it, and no amount can be received in cash so as to maintain transparency in the political funding," the plea said.
It stated that Section 13A was incorporated into the Act, under which a political party’s income derived from interest on securities, earnings from house property, income from other sources, and any income received as voluntary contributions is excluded from the calculation of total income.
The petition has further requested an order directing the Election Commission to examine the Form 24A contribution reports of all recognised political parties and to mandate that they deposit any contribution amounts for which the contributor’s address and/or PAN details have not been provided.