Tax relief for electoral bonds to stay for FY24
Firms, individuals and others who have made donations to political parties through electoral bonds in FY24 would still be able to claim benefits of 100% tax deduction while filing their returns before July 31, 2024, according to an official.
The clarification holds significance as several taxpayers were in a state of dilemma after the apex court declared these bonds as unconstitutional.
A total of 28,030 electoral bonds worth Rs 16,518 crore have been sold from March 2018 to January 2024, according to a report by the Association of Democratic Reforms (ADR).
The BJP has received the highest contributions through the electoral bonds amounting to Rs 6,566 crore, followed by Congress with 1,123 crore, Trinamool Congress, which got Rs 1,092 crore.
Rubal Bansal Maini, Partner, Luthra and Luthra said: “Till the time there is no amendment made in the Income Tax Act, 1961 relating to deduction in respect of contributions given by companies or any person to political parties, the taxpayers can claim 100% deduction of the donations so far made to registered political parties.”
The apex court on Friday struck down the electoral bonds scheme, saying it violates the fundamental right to freedom of expression and the right to information act.
In two separate but unanimous judgments, the apex court directed the State Bank of India, the authorised bank to issue electoral bonds, to furnish all details of electoral bonds purchased since April 12, 2019 till date to the Election Commission of India (ECI) by March 6, and the poll body has been asked to furnish the details on its official website by March 13.
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