Authoritative Guide to Political Party Registration and Compliance in India
This comprehensive legal and procedural guide covers the mandatory requirements, documentation, benefits, and critical compliance under the Representation of the People Act, 1951, for registering a political party in India.
The Legal Framework of Political Parties in India
A political party is a formalized association of individual citizens of India that intends to avail itself of the provisions of **Part IV-A** of the Representation of the People Act, 1951 (RPA, 1951). Registration with the Election Commission of India (ECI) is governed by **Section 29A** of the RPA, 1951, which is mandatory for a party to field candidates and secure electoral symbols.
The ECI grants registration, and based on the electoral performance over time, recognizes two distinct categories of parties:
- **National Parties:** Recognized in at least four states and fulfilling specific criteria regarding vote share and seats won in Lok Sabha or State Assembly elections.
- **State Parties:** Recognized in a particular state by fulfilling similar vote share and seat criteria in that state’s elections.
- **Registered Unrecognised Parties (RUPPs):** Parties that are registered with the ECI but have not secured the necessary vote share or seats to be recognized as a National or State Party.
Detailed Political Party Registration Procedure (Section 29A)
The application for registration must be submitted to the ECI within 30 days from the date of the formation of the party. The application process is meticulous and requires adherence to strict procedural guidelines.
1. Pre-Application Documentation
- **Constitutional Documents:** A complete and authenticated copy of the party’s Constitution/Rules and Regulations, explicitly stating allegiance to the Constitution of India and the principles of Socialism, Secularism, and Democracy.
- **Membership Requirement:** A list of at least 100 registered electors who are members of the party.
- **Affidavits:** Individual affidavits from these 100 members confirming they are not members of any other registered political party.
- **Office Bearer Details:** A complete list of the President, Secretary, Treasurer, and other office bearers, along with their certified electoral roll extracts and criminal antecedent disclosures.
2. Submission and Fee
- The formal application must be submitted in the prescribed format (often referred to as the ECI proforma, replacing the generic Form PP-1) to the Secretary, ECI, New Delhi.
- The application must be accompanied by a non-refundable processing fee of ₹10,000 (Rupees Ten Thousand Only), usually submitted via a Demand Draft favoring the Under Secretary, Election Commission of India.
- Details of the party’s proposed election symbol and official logo are submitted for approval, subject to availability and ECI guidelines.
3. Public Notice and Objections
- The ECI mandates the publication of a public notice regarding the application in two national daily newspapers (one in English and one in a local language) inviting objections.
- A mandatory period (typically 30 days) is provided for any member of the public to file a representation or objection against the registration. The party must be prepared to address these objections before the Commission.
4. Scrutiny and Final Approval
The ECI undertakes a thorough scrutiny of the application, verifying all documents and compliance. Only upon satisfaction that the party meets all statutory requirements of the RPA, 1951, is the party officially registered, granting it the right to contest elections and avail of statutory privileges.
Statutory Benefits and Privileges of Registration
Registration with the ECI is the critical first step for any political entity, granting essential political and financial advantages:
- **Free Symbol Allotment:** Candidates put up by a registered party get priority in the allotment of a common electoral symbol (subject to RUPP status or recognition status).
- **Access to Electoral Rolls:** Registered parties can obtain copies of the electoral rolls free of cost during elections.
- **Publicity Privileges:** Access to free time slots on Doordarshan and All India Radio during elections (available only to recognised National and State Parties).
- **Tax Exemptions:** The most significant financial benefit is the exemption from Income Tax on specific sources of income, detailed below.
Tax Exemptions and Financial Compliance
Political parties registered under Section 29A of the RPA, 1951, are eligible for income tax benefits under the Income Tax Act, 1961, provided they adhere to stringent compliance requirements.
Income Exemption (Section 13A)
Under Section 13A of the Income Tax Act, 1961, a registered political party’s income from the following sources is **100% exempt from tax**:
- Income chargeable under the heads 'Income from House Property,' 'Income from Other Sources,' or 'Capital Gains.'
- Income by way of voluntary contributions received from any person.
Mandatory Compliance for Exemption
To avail of this exemption, the political party must strictly comply with the following conditions:
- **Account Maintenance:** Maintain books of account and other documents enabling the Assessing Officer to deduce the income.
- **Record of Contributions:** Maintain a record of every voluntary contribution in excess of ₹20,000, including the name and address of the person who made the contribution.
- **Cash Limit:** Must not receive any donation of ₹2,000 or more otherwise than by account payee cheque, bank draft, ECS, bank account transfer, or through electoral bonds.
- **Audit and Reporting:** Accounts must be audited by a Chartered Accountant, and a report of donations (under Section 29C of RPA, 1951) must be submitted to the ECI.
- **Return Filing:** Must compulsorily file an Income Tax Return (ITR-7) if the total income (before applying the Section 13A exemption) exceeds the maximum amount not chargeable to tax.
Donor Deduction (Section 80GGC)
Contributions made to registered political parties or electoral trusts are eligible for deduction from the donor’s taxable income:
- **Individual Deduction:** Section 80GGC allows any person (except local authorities and artificial juridical persons wholly or partly funded by the Government) to deduct the entire amount contributed to a registered political party from their Gross Total Income.
- **Corporate Deduction:** Section 80GGB allows Indian companies to deduct contributions made to political parties.
- **Crucial Caveat:** This deduction is **not available** for any sum contributed by way of cash.
Frequently Asked Questions on Compliance
For high-quality information, here are answers to key compliance questions:
- **Q: Which ITR form must a political party file?**
A: A political party must file its return of income using ITR-7. - **Q: Is registration under Section 29A of RPA sufficient for tax exemption?**
A: No. Registration under Section 29A is mandatory, but the party must also fulfill all the prescribed compliance conditions under Section 13A of the Income Tax Act (e.g., audit, record-keeping, cash donation limits) to claim the exemption. - **Q: What is the penalty for failure to comply with Section 13A?**
A: Non-compliance can lead to the denial of the entire tax exemption under Section 13A, making all income taxable at the maximum marginal rate.
0 Comments