Political party & electoral trust

CA Final 515 views 3 replies

sandhya

CA Final

185 Points Posted on 22 March 2016

I have got few doubts abt political parties(PP) and electoral trust(ET).. I know their taxation provisions u/s 13A & 13B but Pls clarify the following :

- are PP & ET required to get their accounts audited under IT act ?

- what is their due date for filing ROI . is it 30th sep or 31st July?

- what are the tax rates applicable for PP & ET?

Replies (3)

Megha Choudhary

Management Trainee

541 Points Posted on 22 March 2016

Under Section 13A of the Income Tax Act, political parties are exempt from paying Income Tax but are required to file their Income Tax returns annually to the Income Tax Department. They enjoy 100% tax exemption from all sources of income.

Similar to the Income Tax Returns (ITR) filed by individual tax payers in India, registered political parties too have to file their Income Tax Returns every year. According to Section 139 (4B), returns of a political party is required to be filed of a particular financial year, audited and submitted by the 30th of September

sandhya

CA Final

185 Points Posted on 22 March 2016

Ok. Thank you.

So PP&ET are required to get their accounts aduited, hence their due date for filing of return is 30th sep.

But business income (apart from voluntary contributions rcd) of PP is taxable. as sec 13A exemption does not apply to business income of PP.

Also the interest earned on depositing the contributions received by ET is taxable as IOS as Sec 13B exemption does not apply to such income

So @ what rates are the abv income of PP & ET taxable ? It it normal slab rates which are applicable to individuals,HUF,AOP/BOI or @ MMR? Pls clarify this.