The government on Saturday reiterated that it has not made any change in the existing Income Tax law that would exempt political parties from depositing old currency in banks.
"It has been reported in some sections of the media as to the government has taken some decision with regards to any special treatment to be made to political parties, which receive donations for electoral purposes. There is not a single change which has not been brought about nor is any change contemplated," Finance Minister Arun Jaitley said.
Under Section 13 A of the Income Tax, political parties receiving donations are immune from attracting the scrutiny of tax officials.
The Finance Minister's comment came after it was reported by a section of media that the political parties registered with the Election Commission depositing scrapped Rs. 500 and Rs. 1000 notes will be free from scrutiny.
Jaitley further said if any political party allows itself to be misused for converting black money into white, then stringent punishment would be awarded to them.
"In the last two and a half years, this government has been in power, the legal and taxation regime with regard to political parties remain actually what is existed for the last 15-20 years. I am cautioning those who misuse these provisions that strong action which is available under current regime will be taken against them," he added.
Jaitley said there are sufficient laws under the present tax regime which are equipped to take action again such unscrupulous methods.
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Earlier, the Central Board of Direct Taxes clarified that the political parties seeking exemptions have to follow certain restrictions.
The exemption from Income-tax is given to only registered political parties subject to certain conditions, mentioned in Section 13A, which includes keeping and maintaining books of accounts and other documents as would enable the Assessing Officer to deduce its income there from; In respect of each voluntary contribution in excess of Rs.20000, the political party will have to maintain a record of such contributions along with the name and address of such person who has made such contribution; The accounts of each such political party is to be audited by a Chartered Accountant; and The political party has to submit a report to the Election Commission about the donations received within a timeframe prescribed.