Political parties cornerstone of democracy; can’t abolish tax

exemptions: Govt New Delhi, Aug 21 (PTI) The government has rejectedsuggestion to abolish tax exemptions given to politicalparties, saying these are to strike a balance betweenencouraging political activities and regulating theiractivities in the interest of democracy in the country. Terming the suggestion of RTI activist Subhash Agrawal asnot feasible, the Ministry of Finance has said, "Politicalinstitutions are cornerstones of any democratic set-up andprovisions contained in the 13A, 80GGB and 80GGC of the IncomeTax Act, 1961 intend to encourage and empower suchinstitutions." Six national political parties — Congress, BJP, BSP,NCP, CPI and CPI(M) — were brought under the purview of theRTI Act by the CIC because they enjoy indirect funding fromthe government in the form of subsidies and tax exemptions. All the political parties brought under the RTI Act areopposing the directive of the transparency panel. "It would not be appropriate to attempt a parallelcomparison with the activities of other entities such astrusts, funds and institutions of charitable nature. Thenature of activities undertaken by charitable entities is verydifferent from that of political parties. "As the very purpose of charitable entities and politicalparties are different, different provisions have been madeunder the Income Tax Act," it said. The response was provided to Agrawal who wanted to knowwhat action has been taken on his suggestion to abolish taxexemption to political parties and NGOs. "Democratic institutions form the very basis of polity inIndia and it was deemed necessary that political parties betreated differentially so that impetus is given to organisedpolitical activity. "Political parties require funds in order to carry out avariety of activities including contesting of elections,organising meetings and rallies, publishing literature amongothers," it said. The response said these activities are both of a regularnature such as organising of rallies and bringing outpublications and also periodic with respect to certain matterssuch as conduct of elections, etc. "Accordingly, political parties have been granted certainexemptions and deductions so that they are able to utilisemaximum funds for the public purpose of political activity,"it said. PTI ABS SMNSMN