All political parties will now be able to file their financial accounts online, with the Election Commission of India (ECI) launching a new web portal to facilitate the same. The online availability of the data is expected to enhance the level of compliance and transparency.
In a letter to all political parties, the commission said that in case any outfit did not wish to file their financial records in the online mode they would have to give a justification for it which the ECI would publish on its website for voters’ benefit.
According to provisions in the Representation of the People (RP) Act, 1951, the political parties are required to submit a Contribution Report, Audited Annual Account and Election Expenditure Statement to the ECI and Chief Electoral Officers of States and Union Territories.
Twin objectives
The online facility “has been created with twin objectives: firstly, to facilitate political parties in overcoming the difficulties in physical filing of reports, and secondly, to ensure timely filing of financial statements in the prescribed or standardised formats,” the letter said.
Sources in the ECI told The Hindu that the move was part of the poll body’s 3C strategy — Cleanup, Crackdown and Compliance.
In May last year, the ECI had delisted 284 Registered Unrecognised Political Parties (RUPPs) and declared 253 more inactive. This had been done as a possible deterrence against misuse of RUPPs for tax evasion and other financial impropriety.
Soon thereafter, the Income Tax Department following the ECI’s expression of concern on misuse of Income Tax provisions, launched an investigation into the affairs of certain RUPPs and conducted nationwide search and seizure operation in September 2022.
Certain clauses in the RP Act as well as the Income-tax Act and other related statutes, allow for exemption or deduction benefits to both the registered political parties and also to their donors.
However, such benefits are conditional to certain compliance measures like timely and correct filing of Contribution Report, filing of Income Tax Return, maintenance of proper books of accounts, getting such accounts audited and complying with the upper limits imposed on cash donations, prohibition on contribution from foreign sources and government companies etc.
The online filing would enable political parties to submit these reports on time and in the standardised format and help them avoid the hassle of physical filing.
Reform proposals
Earlier, in a set of reform proposals to the Law Ministry, the ECI had proposed measures through amendments in the RP Act.
These proposals include reducing the reporting limit for cash contributions from ₹20,000 to ₹2,000, limiting exemption on donation received in cash to lesser of ₹20 crore or 20% of the total donation received, inserting provision in RP Act for mandatory audit and its filing before the ECI, and updating definition of ‘foreign sources’.
