People funding must to ensure party-based democracy: Chidambaram
"Political party is not a commercial venture. Please remember in a democracy, it is the people who must fund the political parties. If you want a party-based democracy, political parties must be funded by people," he said here while responding to a question on why political parties are exempted from paying income tax.
Former Finance Minister P Chidambaram on Saturday said the nature of our democracy is such that political parties cannot function without funding from citizens.
"Political party is not a commercial venture. Please remember in a democracy, it is the people who must fund the political parties. If you want a party-based democracy, political parties must be funded by people," he said here while responding to a question on why political parties are exempted from paying income tax.
In a Budgetry proposal, Finance Minister Arun Jaitley had announced a cap of Rs 2,000 on cash donations to political parties.
The veteran Congress leader, who is a Rajya Sabha MP from Maharashtra, was in a western suburb to campaign for the high-stake BMC elections slated for February 21.
He said as the political parties are not engaged in any kind of commercial business or income earning activities, they collect money from people.
Chidambaram observed the political funding is a "gift of people to the political system," when assumption is that money these parties receive is accounted for and taxes have already been paid on it.
"The assumption is when you give Rs 5,000 to my party, I am assuming that it is accounted money. Therefore, there is no reason to tax again a money given to a political party. Gift is not taxed today as the assumption is that you have paid tax and you are giving gift," he said.
However, he expressed the political parties should maintain accounts which should be audited and submitted to the Election Commission.
The lowering of cash ceiling on political donations to Rs 2,000 from previous Rs 20,000 was announced by Finance Minister Arun Jaitley in Budget 2017-18.
Earlier, the Election Commission had urged the government to amend laws to ban anonymous contributions of Rs 2000 and above made to political parties.
Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.
RECOMMENDED STORIES
Retirement Planning: SIP+SWP combination; Rs 15,000 monthly SIP for 25 years and then Rs 1,52,000 monthly income for 30 years
Top Gold ETF vs Top Large Cap Mutual Fund 10-year Return Calculator: Which has given higher return on Rs 11 lakh investment; see calculations
Retirement Calculator: 40 years of age, Rs 50,000 monthly expenses; what should be retirement corpus and monthly investment
SBI 444-day FD vs Union Bank of India 333-day FD: Know maturity amount on Rs 4 lakh and Rs 8 lakh investments for general and senior citizens
EPF vs SIP vs PPF Calculator: Rs 12,000 monthly investment for 30 years; which can create highest retirement corpus
Home loan EMI vs Mutual Fund SIP Calculator: Rs 70 lakh home loan EMI for 20 years or SIP equal to EMI for 10 years; which can be easier route to buy home; know maths
08:04 AM IST