I-T wants stricter laws on political donations,candidates expenses

To ensure transparent funding of polls,the Income Tax department is likely to ask the government to consider donations to political parties.

To ensure transparent funding of polls,the Income Tax department is likely to ask the government to consider donations to political parties above Rs 20,000 through account payee cheques only.

The department is also of the view that parties should not be allowed to pay any money in cash or cheque to their contesting candidates. Rather,all the expenses of candidates should be taken care of by the party directly.

These are among the recommendations the department is likely to make to Finance Minister Pranab Mukherjee on Tuesday at the 27th annual conference of chief commissioners and directors general of the department,sources said.

Any money received or expenses incurred in excess of Rs 20,000 must be by account payee cheque only, the department believes. This way money thus sanctioned can go only into the account of the person to whom the cheques are made payable. The department believes transparency can also be brought in by parties making expenses on behalf of their candidates directly.

Further,the I-T believes that at least one member of the Election Commission should be from the Indian Revenue Service IRS.

Under Section 13A of the Income Tax Act,1961,the income of parties is exempt from taxes provided they maintain books,keep record of each voluntary contribution made in excess of Rs 20,000 with the name and address of the contributor,and get the accounts audited.

However,the parties have always been found wanting in compliance. To bring in some discipline,the EC had sought the help of the Institute of Chartered Accountant of India to prepare guidelines for parties for maintaining accounts.

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Earlier,the EC had asked the department to monitor expenses of political parties in the recent Assembly elections and the polls in Bihar last year. In fact,Income Tax investigation officers deployed in these states had helped seize over Rs 55 crore in unaccounted money.