The Election Commission of India (ECI) has written to the Law Ministry to limit total cash contribution from unknown sources to a political party to Rs 20 crore or 20 per cent of the party’s total donation, whichever is less.

The Indian Express reported that in its letter issued two weeks ago to the ministry, the ECI has sought amendments to Section 13A of the IT Act and Section 29B of the Representation of the People (RP) Act.

The ECI has proposed amendments to promote cashless funding of parties. The poll panel has suggested that Section 13A of the IT Act, on income tax exemption in voluntary donations, be amended to extend exemption in case of all donations received by cheque and e-transfer. 

With a similar logic, the ECI has also asked the ministry to add a new provision under section 29B of the RP Act to provide that a party shall not receive contributions in cash beyond Rs. 20 crore or 20 per cent of the total contribution, whichever is less.

The Commission has also called for an amendment to Rule 86 under Conduct of Election Rules to make it mandatory for candidates to meet all election expenses in excess of Rs 2,000 through cheque or electronic bank transfer.

According to the report, the ECI has not recommended 100 per cent cashless funding since cadre-based political parties depend on cash donations of small amounts.


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