Quick Summary
The Income Tax (IT) department has launched a major crackdown on suspicious political donations, issuing hundreds of notices to individuals who contributed over ₹5 lakh to lesser-known political parties in the financial year 2020-21. The move comes after tax officials uncovered a large-scale tax eva
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FAQ :
The department is cracking down on suspicious political donations following the discovery of a large-scale tax evasion and money laundering scheme linked to fraudulent tax deductions.
The current crackdown is primarily focusing on donations made in the financial year 2020-21.
Individuals donated money to political parties via cheque but received the same amount back in cash, often with a commission, after claiming 100% tax deductions.
Taxpayers involved have been issued notices and summons. They can file an updated return and pay additional taxes up to 70%, or face a 200% penalty on tax evaded and further legal action.
Yes, in February 2023, the department sent over 5,000 notices to donors of unrecognized political parties for contributions made in FY 2020-21 and FY 2021-22.
Amendments to the ITR-7 form for political parties and charitable trusts have helped detect mismatched donations that are disproportionate to declared incomes.
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