Breaking: Govt Notifies Electoral Bond Scheme allowing Political Donor to Purchase Bonds from Authorized Banks [Read Notification]

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The Central Government, on Wednesday notified the Electrical Bond Scheme which facilitates political donors to buy these bonds by making payments digitally or through cheque and then can gift the same to a registered political party.

The party can can convert these bonds back into money via their bank accounts. The bank account used must be the one notified to the Election Commission and the bonds may have to be redeemed within a prescribed time period.

The bonds are bearer bonds and the identity of the donor will not be known to the receiver.

The bonds shall be issued in the denomination of ` 1000, ` 10,000, ` 1,00,000, ` 10,00,000 and `1,00,00,000. These bonds are valid for a period of fifteen days, the Notification said.

As per the Notification, the bonds are available for purchase by any person for a period of ten days each in the months of January, April, July and October. An additional period of thirty days shall be specified by the Central Government in the year of general elections to the House of People. However, no interest shall be payable on the Bond.

For tax purpose, the face value of the bonds shall be counted as income by way of voluntary contributions received by an eligible political party, for the purpose of exemption from Income-tax under Section 13A of the Income Tax Act, 1961.

The scheme had been announced by the Union Finance Minister  while announcing the Budget 2017.

In line with the Election Commission’s recommendation, the government in last year’s budget session also capped anonymous cash donations to political parties at Rs2,000.

On Tuesday, the Union Government had announced the details of political funding that can be routed by donors to parties through electoral bond scheme.

On Tuesday, finance minister Arun Jaitley said the electoral bonds, which are interest-free banking instruments, can be bought from specified branches of State Bank of India in multiples of Rs1,000, Rs1 lakh, Rs10 lakh or Rs1 crore.

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