Slash anonymous donations from Rs 20,000 to Rs 2,000 for all parties: EC

Going after the funding of political parties, the Election Commission (EC) has proposed that the upper limit for accepting anonymous donations should be Rs 2000 instead of the current Rs 20,000 for all parties. The proposal is aimed at improving transparency in political funding.

"Anonymous contributions above or equal to the amount of Rs 2,000 should be prohibited," the EC recommended on 18 December.

According to reports, the understanding in the EC is that if citizens can be forced to brave hardships due to Centre's demonetisation drive which targets black money, political parties should also be a part of the clean-up.

"It is not acceptable for political parties to say 80-85% of their funding is coming from people contributing sums of up to Rs 20,000. It can be understood some funding (for political parties) has come from small donors or has been raised at jan sabhas but not the lion's share. The Rs 20,000 limit should be brought down to Rs 2,000 or even Rs 1,000," said a source told TOI.

The EC also wants political parties to maintain accounts for all donations and funding, get the accounts audited and submit the audited books to the EC annually. The poll panel wants the government to make these changes by amending the Representation of the People Act, 1951.

"Parties have hundreds of crores in their funds and should invest in going for computerisation for all their donations, including small sums. Why should they not have systems in place to record where every penny they get is coming from?" the source added.

On 3 December, the election panel issued a detailed compendium on proposed electoral reforms.

"If every housewife is being asked to account for every Rs 500 and Rs 1,000 note she has, and small traders and shopkeepers are asked to declare their entire sale by going cashless, it is not fair to let political parties continue with their opaque ways," the source said.

The EC has further proposed that only parties that contest and win seats in parliamentary and assembly elections should be given income tax exemption.

The Income Tax Act, 1961, (Section 13A) gives tax exemptions to political parties for income from house property, voluntary contributions, capital gains and other sources.

The EC's recommendations are already with the Law Commission.