Shameful hypocrisy to exempt political parties from tax scrutiny of their ill-gotten gains
Demonetisation has caused many an uproar and U-turns in India, but the Modi government remains steadfastly committed to the undue privileges and entitlements that political parties as a whole enjoy in this country.
From not coming under Right to Information Act, to tweaking FCRA law retrospectively and allowing for foreign donations for parties, the Modi-led NDA government has been at the forefront of creating a parallel universe of licences that political parties can enjoy, now with legal backing.
The latest in this series of positive discriminations is the mind-boggling exemption from income tax (and I-T investigations) on the deposit in political parties’ bank accounts in the old, demonetised notes of Rs 1,000 and Rs 500, if the amount does not exceed Rs 2,50,000 and has documentation if the funds received are above Rs 20,000.
PM Modi’s confidants
Revenue secretary Hasmukh Adhia has told media persons: “If it is a deposit in the account of a political party, they are exempt. But if it is deposited in individual's account then that information will come into our radar. If the individual is putting money in his own account, then we will get information.”
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| INC members met PM Modi post din in the Parliament, on the last day of the Winter Session. Credit: PIB |
It is the same Hasmukh Adhia who has been credited with suggesting and in fact orchestrating the entire demonetisation gambit with Prime Minister Modi, as the latter, it is increasingly becoming clearer, did not even consult the economists on government payroll, particularly those in NITI Aayog, or even the chief economic adviser, Arvind Subramanian.
In fact, along with RSS ideologue S Gurumurthy, Adhia has been at the centre of this mammoth fiscal recalibration exercise, which has resulted in sucking out of 86 per cent of cash liquidity from the system, which has been hitherto staggering cash dependent.
As is the case, “the Section 13A of the Income Tax Act, 1961 grants exemption from tax to political parties in respect of their income from house property, other sources, capital gains and income by way of voluntary contributions received from any person”.
Exemptions in the era of cash raids
Exactly as scenes of I-T raids on cash hoarders all across India are splashed on our TV screens, we see the ugly hypocrisy of exempting political parties themselves from the transparency debate. The elephant in the room which no political player or bureaucrat wants to touch is indeed the funding of political parties, which is largely untaxed and in fact not even liable to disclosure when done in sums of under Rs 20,000.
This means that innumerable tiny amounts of deposits up to Rs 19,999 can be made to parties’ bank accounts, or in other names, which will be legally exempt for any investigation whatsoever.
The caveat that the tax exemption is applicable only if the political party keeps and mains proper books and documentation of income audited by a chartered accountant is quite laughable, as it is known how CAs are roped in to tweak income registers. Moreover, that the government had earlier asked CAs to keep their (unfavourable) opinion on demonetisation to themselves is not yet forgotten.
Never-ending debacle
This, when honest Indian citizens dealing with cash are dying waiting for cash at ATMs, when war veterans are crying in public for their meager pension money, and when lay-offs related to cash crunch are hitting the roof – makes for a sight worse than outrageous. Given that even hospitals, pharmacies, railway bookings, gas stations etc can now no longer accept the old notes, what logic besides extreme selfishness guides the Centre’s decision to shield political parties from the cashless maelstrom is difficult to comprehend.
And to think that there will be little resistance to this immoral move from the Opposition leaders themselves, since they have been handed over the lifeboat as the economy sinks like the Titanic in the cashless whirlpool.