Mumbai/New Delhi, Dec 18 (IANS): Union Finance Minister Arun Jaitley on Saturday said that no change has been made in tax laws to bar income tax returns of registered political parties being scrutinised with regard to deposit of demonetised currency notes and the law is fully equipped to inspect their accounts.
"In the last two and a half years that the government has been in power, the legal and taxation regime with regard to political parties remains absolutely same to what it existed for the last 15-20 years. There is not a single change that has been brought about, nor is there any change that is contemplated," Jaitley said in Mumbai.
"Under the current system, if any political party allows itself to be misused for conversion of black money into white, then there are already sufficient provisions in the law to take action against the political party and the individual.
"Therefore law is fully equipped, and I am cautioning anyone who misuses these provisions that strong action will be taken against them," he said.
His comments came in wake of some news reports that income tax returns of political parties registered with Election Commission cannot be scrutinised with regard to deposit of demonetised currency notes.
Revenue Secretary Hasmukh Adhia also decried reports on the alleged privilege to political parties, saying that they were false and misleading.
"Post demonetisation, no political party can accept donations in Rs 500 and Rs 1,000 notes since they were rendered illegal tender. If there is any discrepancy, political parties are as liable to be questioned by IT authorities as is anyone else. They enjoy no immunity," Adhia said in a tweet.
"Political parties have not been granted any exemption or privilege, post demonetisation and introduction of Taxation Amendment Act, 2016," Adhia added in another tweet.
Income and donations of political parties fall in the purview of Section 13A of the Income Tax Act 1961 which is more than 35 years old and there is no change in the provision, the Revenue Secretary said.
Earlier, the Finance Ministry, in a statement, also said: "There are enough provisions in the Income Tax Act to scrutinise the accounts of the political parties and these political parties are also subject to other provisions of Income Tax, including filing of returns."
According to the ministry, the exemption from Income Tax is given to only registered political parties subject to conditions like maintenance of books and other documents to enable the assessing officer to deduce the their income.
Political parties have to maintain record of voluntary contributions made by persons in excess of Rs 20,000 including the names and addresses of the donors.
The political parties have to submit a report to Election Commission about donations received within the prescribed timeframe.
The accounts of each such political party is to be audited by a chartered accountant, the ministry said.