Electoral bonds: What SC verdict means for taxes
₹1,000, ₹10,000, ₹1 lakh, ₹10 lakh and ₹1 crore. The apex court directed that the issuing bank, State Bank of India (SBI), shall herewith stop the issuance of electoral bonds and submit complete details—name of the purchaser and the denomination of the electoral bond.
The SBI has also been directed to submit to the Election Commission of India (ECI) the details of political parties which have received contributions through electoral bonds since April 2019 till date. SBI has also been directed to disclose details of each electoral bond encashed by political parties.
The Supreme Court has further directed SBI to submit the above information to the ECI by 6 March. The ECI has been directed to publish the information on its official website within one week, by 13 March.
As per the Income Tax Act, any Indian company or person, contributing to any registered political party in India through an electoral bond is eligible to claim the deduction of equivalent amount from its taxable income, under sections 80GGB and 80GGC, respectively. The Electoral Bond Scheme provided that the electoral bonds shall be available for purchase for a period of 10 days on a quarterly basis, in the months of January, April, July, and October and an additional period of 30 days in the year of general elections.
The scheme also provided that such electoral bonds are valid for encashment by the concerned political party only for 15 days from the date of issue and no payment will be made to a political party if the bond is deposited after the expiry of 15 days. So, for FY 2023-24, the electoral bonds purchased in the specified months of April, July, October 2023 and in January 2024, would have already been encashed by the respective political parties, as
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