'Donation Racket': FIRs Against 3 Gujarat Parties For Causing Loss Of Over Rs 560 Cr, Pg8

Key Highlights:

• The Gujarat Police have registered three First Information Reports (FIRs) against three Registered Unrecognised Political Parties (RUPPs).
• The cases allege a loss of over Rs 560 crore to the exchequer through purported bogus donations totaling nearly Rs 1,870 crore.
• The accused parties are Bharatiya National Janata Dal (BNJD), Swatantrata Abhivyakti Party (SAP), and Garib Kalyan Party (GKP).
• The FIRs were filed on September 25 by the CID Crime, Gandhinagar Zone, based on complaints from the Income Tax (I-T) Department.

Detailed Insights:

• The allegations involve parties seeking dummy donations from shell firms and providing cashbacks after deducting commissions.
• Donors allegedly claimed 100% tax deductions under Section 80GGC of the Income Tax Act using receipts from these parties.
• The money was then reportedly rerouted back to donors in cash, often through layers of shell firms or bogus entities, after commission deduction.
• The BNJD case is the largest, alleging a tax loss of nearly Rs 343 crore from Rs 1,143.85 crore in donations.
• The FIRs have been registered under multiple provisions of the Bharatiya Nyaya Sanhita (BNS), including cheating, criminal conspiracy, forgery, and use of forged documents.
• These RUPPs have participated in Gujarat elections since 2017, despite their candidates frequently forfeiting deposits.
• The I-T Department's investigation, which lasted over a year, suggests these parties had no genuine political activity and served as vehicles for commission collection.

Key Concepts Involved:

• Registered Unrecognised Political Parties (RUPPs): Political parties registered with the Election Commission of India but not recognized as national or state parties.
• Section 80GGC of the Income Tax Act: Allows 100% deduction for contributions made by individuals to political parties or electoral trusts.
• Tax Evasion: The illegal act of deliberately misrepresenting financial information to avoid paying taxes.
• Shell Firms: Non-operating companies used as vehicles for financial transactions, often to obscure the true nature of the dealings.