Quick Summary
The Income Tax Department has initiated a probe into political donations made to registered yet unrecognized political parties during the financial years 2020-21 and 2021-22. The department has issued notices to numerous taxpayers suspected of contributing to such parties, aiming to investigate pote
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FAQ :
The department has sent notices to taxpayers who made donations to registered but unrecognised political parties during the 2020-21 and 2021-22 financial years, investigating potential tax evasion and money laundering.
Approximately 5,000 notices have been dispatched for the financial years 2020-21 and 2021-22.
Suspicion arises when the donated amounts do not align with declared income, particularly when donations significantly exceed an individual's total income or when a large percentage of income is allocated to these parties.
A political party is considered unrecognised if it fails to contest elections or secure a qualifying vote percentage in assembly or national elections.
Last year, similar notices led to taxpayers filing revised returns, which were accompanied by penalties and interest.
Yes, the Central Board of Direct Taxes (CBDT) introduced amendments to ITR-7 in 2022, requiring entities with income exceeding ₹50 lakh to provide additional details on political party contributions.
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