New Delhi. Taxpayers have received a rebate of Rs 3,967.54 crore in the financial year 2022-22 after donating to political parties. The central government has estimated this in its recent budget. This figure is said to be 13 percent more than 2021-22. According to an analysis by the Indian Express, political donations have seen a steady increase in the last 9 years.
In 2014-15, donors got a tax exemption of Rs 170.86 crore, which increased to Rs 3516 crore by 2021-22. The tax exemption given in lieu of donations in 9 years put a total burden of Rs 12270 crore on the government treasury. The data for the financial year 2023-24 is yet to be made public.
What is the rule of exemption
Under the Income Tax Act 1961, Hindu Undivided Family (HUF), body of individuals, Indian companies and taxpayers can claim tax exemption on donations made to a political party. According to the report, out of Rs 3967 crore, the highest tax exemption of Rs 2003 crore has been given on account of corporate donations. This exemption has been given under 80GGB. Section 80GGB of the Income Tax Act states that when a company calculates its tax liability, the amount given by it to an electoral trust or political party will be deducted. However, contributions made through cash will not be included in it.
This rule also applies to individuals
Almost the same rule applies to donations made by an individual to a political trust or party under 80GGC. Let us tell you that tax exemption of Rs 1862 crore was claimed by individuals. On the other hand, non-corporate taxpayers availed tax exemption of Rs 101.73 crore.
FIRST PUBLISHED : July 30, 2024, 20:54 IST