Lok Sabha Question No. 9 (STARRED), answered on 2018-02-02
Subject: Electoral Bond Scheme
Ministry: FINANCE
Asked by: Tejpratap Singh,Yadav, OM BIRLA

## Government of India Ministry of Finance Department of Economic Affairs

LOK SABHA STARRED   QUESTION NO. *9 TO BE ANSWERED ON FRIDAY, 2 nd  February 2018 MAGHA 13, 1939 (SAKA)

## ELECTORAL BOND SCHEME

- *9. SHRI TEJ PRATAP SINGH YADAV: SHRI OM BIRLA:

Will the Minister of FINANCE   ( वित्त मंत्री ) be pleased to state:

- (a) whether the Government has launched the electoral bond scheme to regulate and cleanse the system of political funding/donations and if so, the details including the aims, objectives and the salient features thereof;

- (b) the  mechanism  that  will  be  followed  by  the  Government  to  maintain  the transparency and effectiveness of the electoral bond scheme;

- (c) whether  various  stakeholders  including  political  parties  have  raised  concerns regarding the lacunae in the scheme that make election funding more opaque rather than transparent and if so, the details thereof;

- (d) whether some tax benefit will be provided to the donor and the recipient under the said scheme, if so, the details thereof and if not the reasons therefor; and

- (e) whether  the  Government  also  intends  to  introduce  the  mandatory  use  of Aadhaar  card  under  the  scheme,  if  so,  the  details  thereof  and  if  not,  the  reasons therefor?

## ANSWER

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FINANCE MINISTER                                          (SHRI   ARUN JAITLEY)

- (a) to (e ): A statement is placed on the Table of the House.

## Statement referred to in reply to Lok Sabha Starred Question No.*9 for answer on February  02,  2018  raised  by  SHRI  TEJ  PRATAP  SINGH  YADAV  AND  SHRI  OM BIRLA Regarding ELECTORAL BOND SCHEME

(a) The  Government  notified  the  Electoral  Bond  Scheme,  2018  to  cleanse  the system  of  political  funding  in  the  country  on  January  02,  2018.  Broad  features  of Electoral Bond Scheme, 2018 are:

1. Electoral  Bond  (EB)  would  be  a  bearer  instrument  in  the  nature  of  a Promissory Note and an interest free banking instrument. A citizen of India or a body incorporated in India is eligible to purchase the bond.

2. Electoral bond would be issued for a certain value denominations from the specified branches of the State Bank of India (SBI).

3. Tenor of the Electoral Bonds is for 15 days during which it can be used for making donation only to the political parties registered under section 29A of the  Representation  of  the  Peoples  Act,  1951  (43  of  1951)  and  which  have secured  not  less  than  one  per  cent  of  the  votes  polled  in  the  last  general election to the House of the People or a Legislative Assembly. It will not carry the name of payee or the donor.

4. The bonds under the Scheme shall be available for purchase for a period of 10 days each in the months of January, April, July and October, as may be specified by the Central Government. An additional period of 30 days shall be specified by the Central Government in the year of the General election to the House of People.

(b) The scheme of EB is to provide anonymity to the donors but at the same time establish  a  transparent  political  funding  system.  Bonds  can  be  purchased  only  after making  payment  through  a  KYC  compliant  account.  Further,  the  bond  shall  be encashed by an eligible political party only through a designated bank account with the authorised bank. Electoral Bond is envisaged as an additional banking instrument for giving donations to registered political parties.

- (c ) No such concern has been received so far by the Government.

( d) There is no specific provision in the scheme to grant any special tax benefit to the  donor.  The  Income  Tax  Act,  1961,  however,  provide  for  tax  deduction  on  the amount of contribution to a political party or an electoral trust subject to the condition that  such  contributions  shall  not  be  made  in  cash  and  to  such  other  conditions  as specified  under  sections  80GGB  and  80GGC.  Further  exemption from  income-tax  is available  to  a  political  party  (i.e.  the  recipient)  under  section  13A  of  the  Act  on  any income  received  in  the  nature  of  voluntary  contributions,  subject  to  the  conditions specified in the said section.

- ( e ) There is no proposal to make use of Aadhaar mandatory under the Scheme.

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