I-T charts steps to clean up poll expenditure

In order to help the Election Commission of India which is taking steps to clean up election funding, the income-tax department plans to propose that political parties be barred from paying money to individual candidates and instead mandate that all election-related expenditure be handled by the parties themselves.

In order to help the Election Commission of India (EC) which is taking steps to clean up election funding, the income-tax department plans to propose that political parties be barred from paying money to individual candidates and instead mandate that all election-related expenditure be handled by the parties themselves. The EC had sought the department’s inputs on preventing the flow of black money into electioneering.

The I-T department would also recommend that any payment above R20,000 by parties to meet electoral expenses should be through account payee cheques only.

These proposals are likely to be taken up by chief commissioners and directors-general of income tax department at the annual conference on May 25-26, official sources told FE. The department also wants one member of the Election Commission to be selected from the Indian Revenue Service.

With the rising incidence of political parties using money power to buy votes, the EC had asked the I-T department to keep a close eye on the movement of cash during elections. Based on the EC order, the revenue department was vigilant during Assembly elections in six states and union territories, recovering over R50 crore.

?We kept a close watch on the movement of cash at airports, railway stations and birthday parties where gifts are exchanged, among others,? a revenue department official said.

Currently, there are caps on the amount of money that can be spent on elections ? R40 lakh for candidates for Parliament elections and R16 lakh for assembly elections. It is, however, common knowledge that in most cases, the amounts spent are much higher. Donations to political parties are tax-exempt provided the parties disclose funding details and file returns.

Apart from proposal on election finance, the conference would also deliberate upon the rollout of Aaykar Sewa Kendra to 200 centres from 11 at present, TDS challenges and opportunities and processing of returns of income in centralised processing centres, among others. With new challenges and opportunities coming up, tax department also wants its manpower to be doubled.

This article was first uploaded on May twenty-four, twenty eleven, at twenty minutes past twelve in the am.