26199Poll panel tightens party purse strings - Deposit funds in banks and restrict cash transactions: EC
- Aug 30, 2014
Poll panel tightens party purse strings
- Deposit funds in banks and restrict cash transactions: EC
New Delhi, Aug. 29 (PTI): The Election Commission has asked political parties to deposit all their funds in banks and to restrict cash transactions, in guidelines issued today to bring transparency and accountability in poll spending.
The guidelines come into effect from October 1.
The Election Commission order under Article 324 of the Constitution (superintendence, direction and control of elections) asks all parties to duly account for any donation received in cash in their books and to deposit the sum in their bank accounts within a week of its receipt.
However, a reasonable amount required for day-to-day functioning and for defraying cash expenses can be retained.
The poll panel said concern has been expressed in various quarters that money power was disturbing the level playing field and vitiating the purity of elections.
It is desirable for political parties to observe transparency and accountability in respect of funds raised and expenditure incurred during elections and at other times, the commission said, and added that the guidelines were necessary to ensure that.
Treasurers of political parties will be required to ensure that accounts are maintained at the state and lower levels and to maintain consolidated accounts at the central party headquarters.
The accounts shall conform to the guidance note on accounting and auditing of political parties issued by the Institute of Chartered Accountants of India. The annual accounts shall be audited and certified by chartered accountants as required under the Income Tax Act.
A party will have to ensure that no payment in excess of Rs 20,000 is made to any person or company in cash, except in a village or town not served by a bank. The restriction will not apply to payments made to any employee or party functionary towards salary, pension or reimbursement of expenses or where cash payment is required under any statute.
The guidelines refer to the Representation of the People Act provision that sets a ceiling for a candidate’s election expenditure and make it clear that assistance from a political party to a candidate cannot exceed that ceiling.
“Any payment in this regard by the party shall be made through crossed account payee cheque or draft or through bank account transfer and not in cash,” the commission said.
Income Tax provisions do not allow any deduction on contributions made in cash by any person or company to a political party, it underlined.
Accordingly, the guidelines require political parties to maintain names and addresses of all individuals, companies or entities making cash donations other than petty sums contributed by the public during rallies.
Recognised political parties shall file all reports, including the contribution reports, the audited annual accounts and the election expenditure statements, with the commission.
Unrecognised parties shall file them with the chief electoral officer of the respective state.
In order to bring uniformity, all political parties shall submit to the commission or to any authority mentioned by it a copy of the annual accounts with the auditors’ report before October 31 of each year.
The commission said it had sought suggestions and inputs from all recognised political parties for the guidelines.