Political parties depositing more than Rs 2.5 lakh of old notes will not be scrutinised by Income Tax Dept

In a much surprise to the commoners, the government has said that political parties depositing the demonetised Rs 500 and Rs 1,000 notes in their accounts will not be scrutinized by tax authorities.

Revenue secretary Hasmukh Adhia told the media that while political parties will be exempted from reviews, individuals depositing money of political parties will be come under tax authority’s radar.

The Section 13A of the Income Tax Act, 1961 grants exemption from tax to political parties in respect of their income from house property, other sources, capital gains and income by way of voluntary contributions received from any person.

Adhia was replying in response to a question whether the government is also investigating political parties/political treasuries depositing their own cash in banks.

"We will not go unnecessarily after those with Rs 2.5 lakh deposits. But where we find people have tried to misuse the provision by putting in multiple accounts in different banks (we will go after them),” Adhia clarified.