Why do political parties in India do not pay Income Tax ?
AS REGARDS taxation of political parties, the income tax law prevalent in India has shown a kind and compassionate treatment. Section 13A of the Income-tax Act, 1961 confers tax-exemption to recognized political parties for income from house property, income by way of voluntary contributions, income from capital gains and income from other sources. In other words, only income under the head salaries and income from business or profession are chargeable to tax in the hands of political parties in India. These political outfits can enjoy the above-said tax-exemption if they maintain proper books of accounts and other documents along with a record of contributions in respect of donations to the party in excess of Rs 20, 000. Further, the accounts of such political party are to be audited by a chartered accountant and the party must be registered with the Election Commission of India. However, it would be enough if such political party keeps and maintains such books of accounts and other d