Special provision relating to incomes of political parties.

Any income of a political party which is chargeable under the head 3*** “Income from house property” or “Income from other sources” or 4[Capital gains or] any income by way of voluntary contributions received by a political party from any person shall not be included in the total income of the previous year of such political party:

¹ Subs. by Act 16 of 1972, s. 7, for Explanation 1 (w.e.f. 1-4-1973).

² Ins. by Act 29 of 1978, s. 2 (w.e.f. 1-4-1979).

⁴ Ins. by Act 32 of 2003, s. 12 (w.e.f. 1-4-1979).

3. The words “Interest on securities” omitted by Act 26 of 1988, s. 7 (w.e.f. 1-4-1989).

Provided that—

1. (a) such political party keeps and maintains such books of account and other documents as would enable the 1[Assessing Officer] to properly deduce its income therefrom;
2. (b) in respect of each such voluntary contribution 2[other than contribution by way of electoral bond] in excess of 3[twenty thousand rupees], such political party keeps and maintains a record of such contribution and the name and address of the person who has made such contribution; 4***
3. (c) the accounts of such political party are audited by an accountant as defined in the Explanation below sub-section (2) of section 288 2[; and] 2[(d) no donation exceeding two thousand rupees is received by such political party otherwise than by an account payee cheque drawn on a bank or an account payee bank draft or use of electronic clearing system through a bank account or through electoral bond. Explanation.––For the purposes of this proviso, “electoral bond” means a bond referred to in the Explanation to sub-section (3) of section 31 of the Reserve Bank of India Act, 1934 (2 of 1934):] 5[Provided further that if the treasurer of such political party or any other person authorised by that political party in this behalf fails to submit a report under sub-section (3) of section 29C of the Representation of the People Act, 1951 (43 of 1951) for a financial year, no exemption under this section shall be available for that political party for such financial year:] 2[Provided also that such political party furnishes a return of income for the previous year in accordance with the provisions of sub-section (4B) of section 139 on or before the due date under that section.] 6[Explanation.—For the purposes of this section, “political party” means a political party registered under section 29A of the Representation of the People Act, 1951 (43 of 1951).]