The Congress today flagged Rs 10,000 crore Income Tax evasion scam through unrecognised political parties. Senior Congress leader and former MP Shakti Singh Gohil on Wednesday revealed that more than Rs 10,000 crore in black money had been generated through ‘registered unrecognised political parties’ (RUPPs), accusing the BJP and its associates of using such entities to facilitate tax evasion.
Addressing a press conference here today, Gohil disclosed that around 3,260 RUPPs were being used as a mechanism through which individuals and companies could claim tax deductions on donations made to political parties, while a portion of the money was returned to donors as cash after deducting commissions. “More than Rs 10,000 crore of black money has been generated through these fake political parties and there has been an open loot of tax revenue,” Gohil alleged.
He claimed that donations made to political parties qualify for tax benefits under provisions of the Income Tax Act, including Sections 80GGC and 80GGB. According to him, the racket involved donations being made to RUPPs, with the parties’ associates retaining commissions ranging between two and 15 per cent and returning the remaining amount to donors in cash. Gohil said that individuals with taxable income above Rs 5 crore could face an effective tax burden of over 42 per cent after accounting for basic income tax, surcharge and cess, and noted that such arrangements were being exploited to evade legitimate tax liabilities.
He further said that tax authorities and tribunals had detected instances of such “fraud”, but questioned why criminal prosecution and penalties had not been imposed in the cases concerned. “If deliberate false entries are made for tax evasion, the law provides for stringent penalties and prosecution,” Gohil said, referring to provisions of the Income Tax Act, including Sections 276C(1) and 277. He alleged that despite the detection of such violations, neither the 200 percent penalty nor criminal prosecution carrying a provision of imprisonment of up to seven years had been pursued in the cases he was referring to.
Gohil also questioned the role of the Election Commission, saying its 2014 guidelines on transparency and accountability in political funding required political parties to disclose details of donations and expenditure and for relevant information to be shared with the Income Tax Department. He alleged that these requirements had not been adequately enforced and demanded action against those allegedly involved in creating and operating such political parties. “Modi ji remains silent on black money while the country is being run on what we call fake GDP figures,” Gohil said, accusing the BJP government of adopting a dual approach towards black money.
