₹1,870 Crore in Donations, ₹560 Crore in Tax Evasion: Gujarat CID Investigating 4 ‘Political Parties’

According to an 'India Today' report, the Income Tax Department estimates that the exchequer has suffered a loss of over ₹560 crore due to these alleged transactions.

CMI Times Web Desk
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₹560 Crore in Tax Evasion: The Gujarat CID (Crime) and the Income Tax Department have registered multiple FIRs against four registered but unrecognised political parties (RUPPs), Bharatiya National Janata Dal (BNJD), Swatantrata Abhivyakti Party (SAP), Garib Kalyan Party (GKP), and Satyavadi Rakshak Party (SRP). It is alleged that these parties were acting as fronts for a large-scale network involving bogus donations and tax evasion.

According to an ‘India Today’ report, the Income Tax Department estimates that the exchequer has suffered a loss of over ₹560 crore due to these alleged transactions.

BNJD is registered in Gandhinagar, while both GKP and SAP are registered in Ahmedabad. Although these three political parties are registered with the Election Commission, they have not yet received official recognition.

According to the FIRs and Income Tax complaints, taxpayers allegedly made donations through banking channels, obtained receipts to claim tax exemptions, and subsequently withdrew the bulk of the money in cash after deducting a commission.

The key highlights of the investigation are as follows:

A) Modus Operandi: According to investigators, these parties existed primarily “on paper” and engaged in little to no actual political activity (many of their candidates consistently forfeited their security deposits in state elections). It is believed that taxpayers transferred large sums into the parties’ bank accounts through formal channels to claim tax exemptions on political donations.

B) Circulation and Commission: Subsequently, the parties allegedly routed the funds through shell companies (bogus firms), deducted a commission (reportedly up to 10%), and returned the bulk of the money to the donors in cash.

C) Scope of Allegations: All four parties are under investigation regarding suspicious donations amounting to thousands of crores of rupees and an estimated tax loss to the public exchequer running into hundreds of crores:

Poltical PartyAllegations (Tax Evasion)
BNJDAllegedly received over ₹1,143 crore from thousands of donors
SAP and GKPSuspicious entries totalling hundreds of crores of rupees were detected in the cases of both these parties
SRPA separate FIR was registered against this party for concealing funds amounting to approximately ₹415 crore

Legal Action: The Gujarat Police and CID have registered criminal cases under the ‘Bharatiya Nyaya Sanhita’ (BNS) against the parties’ presidents, office-bearers, and associated chartered accountants on charges of fraud, criminal conspiracy, and forgery.

Also Read: Can Even Highly Qualified Professionals fall Victim to Cyber Fraud? Insights from an IIT Madras Study

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