Tax exemptions for political donations: the individual-corporate hole widens

Projections made by the Union finance ministry within the Union Funds 2025-26 for the monetary yr 2023-24 estimate the income forgone owing to donations to political events is Rs 2,557.15 crore from particular person and Hindu Undivided Households (HUF) donations, and a complete of Rs 3,265.14 crore total. For a similar monetary yr, donations to political events from corporates resulted in a income forgone of Rs 577 crore.

In FY 2023-24, 27 political events declared donations amounting to Rs 7,201.58 crore, a tenfold enhance from Rs 714.21 crore reported by 43 political events in FY 2015-16. Over the previous 9 years, political events have acquired a complete of Rs 28,105.14 crore in donations, with income forgone throughout this era (each precise and projected) amounting to Rs 11,813 crore.

Based on the Election Fee’s web site, in FY 2023-24, the BJP acquired Rs 3,967 crore in donations, Congress acquired Rs 1,130 crore, Trinamool Congress acquired Rs 618 crore, Bharat Rashtra Samithi acquired Rs 580 crore, Telugu Desam Celebration acquired Rs 274.65 crore, BJD acquired one other Rs 245.5 crore, and Yuvajana Sramika Rythu Congress Celebration (YSRCP) acquired Rs 184 crore. This was the ultimate yr during which electoral bonds had been in circulation.

Throughout the earlier Lok Sabha election, in FY 18-19 and FY 19-20, the overall contributions reported by the political events for these two years had been Rs 8,779.65 cr (Rs 4,050.42 + Rs 4,729.23). For FY 23-24, which is the primary yr of the 2024 Lok Sabha elections, simply 27 events have declared as having acquired Rs 7,201.58 cr. Information for FY 24-25 will probably be recognized throughout the second half of this yr.

Venkatesh Nayak, director of the Commonwealth Human Rights Initiative, wonders which socio-economic classes particular person and HUF donors belong to, on condition that their donations to political events lately have surpassed these made by corporates. “Are these contributions primarily from high-net-worth people, or are residents from the center courses additionally more and more donating to political events?”