Party time for many politicos to avoid tax

Hyderabad: Data from Election Commission of India revealed that the number of recognised and registered but unrecognised political parties have increased twofold during election years, in the last decade. There are more than 2,000 political parties in India. A majority of them were registered in the election years 2014 and 2016, however over 31 per cent of them did not contest.

Data indicates that not even a third of these parties participated in the 2014 Lok Sabha elections. It looks like political parties are registered to take advantage of tax benefits rather than to contest elections.

The data released by the EC shows that one unrecognised party was registered in 2014, 10 in 2016 and two in 2018 from the two Telugu-speaking states. Out of these 13 unrecognised parties, the office address of three (All Indian Party — Assam gardens, Visakhapatnam, All India Sadguna Party, Chittoor, Anna YSR Congress Party, Kadapa,  have been registered in Andhra Pradesh and the rest have their party office in Hyderabad-Secunderabad. Some of these parties with offices in Hyderabad are: Mahajana Socialist Party, Balamrai Rasool-pura, Andhra Nadu Party, Masab Tank, Bahujan Republican Party, Ramnagar, Bharatiya Seva Dal, Somasunderam Street, Secunderabad, Jai Telangana Party Srinagar, Hyderabad, Telangana Praja Party, Chudi Bazaar Dargah, Satyayug Party, Mekala Mandi Road, Bholakpur, National Citizens Party —  Maruti Tower, Kukatpally.

D. Rakesh Reddy, founder of Factly (the public information portal) says that the parties registered in Telangana state and Andhra Pradesh are all unrecognised. “The only benefit they enjoy is tax exemption. Donations to these parties are 100 per cent tax free, however, the parties have to submit an audit report to the EC defining their income (donations) and expenditure.”

It is alleged that political parties are floated before elections to launder black money. For example, if unaccounted cash of Rs 1 lakh is to be donated, one can create names of contributors and below Rs 2,000 can be donated in form of cash. The party founders can show expenses in the name of public meetings. 

"Other facilities like government providing support in the form of land at discounted prices for a party office and other perks are only for recognised parties, added Dr Reddy.

This correspondent spoke to members of two unrecognised parties. Baldhir Singh, the founder of Bharatiya Seva, a party registered in 2014, explained why they did not contest in 2014 elections. 

“Candidates failed to spend for election thus no contestant announced by the party came forward to fight elections, thus BSD did not participate,” he said.

Jai Simha, founder of the National Citizens’ Party registered with the EC in 2016, said, “The party candidates will contest in 2018 Assembly elections from a few constituencies in Secunderabad.” end-of