The Income Tax Department today cautioned people against indulging in illegal cash transactions including donating more than Rs 2,000 to political parties.
In a bid to clean up election funding, the government early this year had notified ‘electoral bonds’ that can be bought from specified branches of the SBI and used to donate money to political parties. According to the scheme, no person should make a cash donation of over Rs 2,000 to a political party.
The tax department, in advertisements issued in leading dailies today, said a person should not “donate in excess of Rs 2,000 in cash to a registered trust/political party”. This is the first public advisory that the department or its policy-making body, the Central Board of Direct Taxes (CBDT) has issued vis-a-vis political donations. It is understood that the clause has been added in the I-T public advisory in the backdrop of the government notifying the electoral bonds scheme.
The department also stipulated some more don’ts for the public like, “do not accept cash of Rs 2 lakh or more in aggregate from a single person in a day or for one or more transactions relating to one event or occasion” and “Do not receive or repay Rs 20,000 or more in cash for transfer of immovable property.”
The IT Department also added that one should not pay “more than Rs 10,000 in cash relating to expenditure of business or profession”. The taxman asked public to say “no to cash transactions” of all these kinds. It added that contravention of these threshold cash limits “may result in levy of tax/penalty”. “Go cashless. Go clean,” the advertisement underlined. It also urged the public to inform it about such violations or any instance of blackmoney or benami assets transaction to it over email or to the jurisdictional Principal Commissioner of the department.
The electoral bonds, which are being pitched as an alternative to cash donations made to political parties, will be available at specified branches of the State Bank of India (SBI) for 10 days each in months of January, April, July and October. The bonds, which would be valid for 15 days, will not carry the donor’s name even though the purchaser would have to fulfil KYC norms at the bank.