MUMBAI: Income Tax (I-T) officials are carrying out raids at various locations in Gujarat and Maharashtra against 123 registered unrecognised political parties for tax evasion.
Around 250 I-T officials of Mumbai and Gujarat are involved in the raids which will continue for a couple of day.
Similar raids are continuing at other parts of the country also.
Two of such political parties are in Mumbai, one operates from a slum at Sion Koliwada and another from a small flat at Borivali.
The two parties had collected donations of Rs 150 crore in the last two years helping their associates (hawala operators) to evade tax and then returning them the money in cash.
The presidents of the two parties would get 0.01 % of the total amount rotated through their parties as commission. The sources said that these parties have no much political activity and formed mainly for tax evasion.
The I-T recorded the statement of the presidents of the two Mumbai-based unrecognised political parties who said that they formed the parties on suggestion of Gujarat-based hawala operator, who handles entire finance of their party. They also admitted that they had received a nominal amount as commission for offering their help to hawala operators.
“There are around 2,044 registered parties in the country according to three years old government record, which are not recognised as they don’t have much political activities and most of them are involved in similar fraud,” said an I-T source.
I-T suspect that these political parties helped hawala operators to evade tax on thousands of crore rupees after showing it donation.
Sources stated that section 80GGC of Income Tax says that an individual can donate any amount to any political party registered under section 29A of the Representation of the People Act. The individual then can avail tax deduction upto 100% of the donated amount.
Sources said that most of the registered and unrecognised parties are misusing the provision for tax evasion and generating the unaccounted money.
While explaining the modus-operandi, an I-T source said that hawala operators roped-in their contact for forming a political party and getting it registered with the authority. The hawala operator keeps all financial and bank account control of the parties with them. The operators transfer huge amount to these political parties via cheque or online transactions showing donation. Afterward, the money gets transfered from the account of the political parties to different accounts showing various expenses. The operators layers the money further with help of shell companies before withdrawing it in cash for themselves, thus avoiding paying tax on it.
Around 250 I-T officials of Mumbai and Gujarat are involved in the raids which will continue for a couple of day.
Similar raids are continuing at other parts of the country also.
Two of such political parties are in Mumbai, one operates from a slum at Sion Koliwada and another from a small flat at Borivali.
The two parties had collected donations of Rs 150 crore in the last two years helping their associates (hawala operators) to evade tax and then returning them the money in cash.
The presidents of the two parties would get 0.01 % of the total amount rotated through their parties as commission. The sources said that these parties have no much political activity and formed mainly for tax evasion.
The I-T recorded the statement of the presidents of the two Mumbai-based unrecognised political parties who said that they formed the parties on suggestion of Gujarat-based hawala operator, who handles entire finance of their party. They also admitted that they had received a nominal amount as commission for offering their help to hawala operators.
“There are around 2,044 registered parties in the country according to three years old government record, which are not recognised as they don’t have much political activities and most of them are involved in similar fraud,” said an I-T source.
I-T suspect that these political parties helped hawala operators to evade tax on thousands of crore rupees after showing it donation.
Sources stated that section 80GGC of Income Tax says that an individual can donate any amount to any political party registered under section 29A of the Representation of the People Act. The individual then can avail tax deduction upto 100% of the donated amount.
Sources said that most of the registered and unrecognised parties are misusing the provision for tax evasion and generating the unaccounted money.
While explaining the modus-operandi, an I-T source said that hawala operators roped-in their contact for forming a political party and getting it registered with the authority. The hawala operator keeps all financial and bank account control of the parties with them. The operators transfer huge amount to these political parties via cheque or online transactions showing donation. Afterward, the money gets transfered from the account of the political parties to different accounts showing various expenses. The operators layers the money further with help of shell companies before withdrawing it in cash for themselves, thus avoiding paying tax on it.