Swaraj India party today said the Income Tax department’s decision to continue to provide immunity to political parties from having to reveal their sources could turn them into money laundering centers.
According to Section 13(A) of the Income Tax Act, 1961, if you have registered a political party, you can deposit any amount of money after opening an account in that party’s name.
Swaraj India, which will organize a rally against black money in Delhi on Sunday, said the loophole for parties should have been plugged before or along with the demonetization move.
“You have created new rules for everyone, but you haven’t created a new rule for political parties,” Swaraj India leader Yogendra Yadav. “They want everyone to be clean, except themselves.”
Yadav also raised questions on Congress Vice President Rahul Gandhi’s sincerity in making sensationalist statements.
Several days ago, Gandhi said he has proof about Prime Minister Narendra Modi’s personal corruption that would cause “an earthquake” if revealed. But he has so far refused to reveal the details, despite relentless taunting by rivals like Arvind Kejriwal and Subramanian Swamy.
“He merely wants to make big allegations in the Parliament, taking advantage of the immunity offered to MPs,” Yadav said.
According to Indian law, one cannot be dragged to court for anything uttered in the Parliament. Otherwise, one can be thrown into jail for accusations for which one does not have any proof.
Under India’s Income Tax Act, religious institutions and political parties not only enjoy exemption when it comes to declaring the source of their income, but they also don’t need to pay tax on the same.
“Parties will become big centers of money laundering like religious places are now,” said Prashant Bhushan.
Bhushan said many temple authorities are offering to convert old currency into new ones by charging a 30% commission.
“Neither need to declare their sources. They can deposit any amount.. 5000 cr and say we got it as a donation.”
It is, however, not clear what kind of scrutiny is exercised when parties withdraw the amounts so deposited. For example, even if a party takes money from a corrupt individual and deposits it in the bank, it remains to be seen how it will be able to return the money to the individual when he demands it.
Many religious institutions, for example, have to get their expenditure audited and certified.
Asked if he intended to approach the Supreme Court on this matter, Bhushan was non-committal.
He said he already has a similar case in the Supreme Court about allowing political parties to take donations from foreign companies and organizations.
He accused politicians of duplicity as, on the one hand, they prevent non-governmental organizations like Green Peace from taking donations from abroad, but at the same time have no qualms about taking foreign funds themselves.
“You are preventing NGOs from accepting foreign donations saying they will fall under foreign influence which is not good, and on the other hand, you are letting political parties take foreign contributions,” he said, asking if foreign influence on political parties is any less harmful than foreign influence on NGOs.
Green Peace, an environmental NGO, has had its bank accounts frozen by the Modi government, which has tended to view global NGOs with suspicion. According to some in the government, many of these NGOs are misused by international organizations to slow down India’s economic growth in the name of protecting tribal rights, the environment and so on.
Unlike other parties, Swaraj India, led by Yogendra Yadav and Bhushan, has generally adopted a supportive stance towards Narendra Modi’s demonetization move and lauded the motive, but has been critical of the implementation.
Bhushan also said Modi has not taken action against the biggest fish in the black money game, which include the biggest businessmen in India.