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CS Executive · Tax Laws and Practice · Incomes which do not form part of Total Income

Under the Income-tax Act, 2025, how are incomes of political parties and electoral trusts that are enumerated in Schedule VIII treated for computing total income?

Section 12 of the Income-tax Act, 2025 excludes the incomes enumerated in Schedule VIII from the total income of political parties and electoral trusts, but only if the conditions specified in that Schedule are fulfilled. If they are not, the income is charged to tax for that tax year.

  1. AThey are excluded, subject to fulfilment of the conditions in Schedule VIIICorrect
  2. BThey are excluded unconditionally
  3. CThey are taxed under the head Income from other sources only
  4. DThey are excluded only under section 11

Explanation

Section 12(1) provides that income enumerated in Schedule VIII is not included in the total income of a political party or electoral trust, subject to the conditions in that Schedule. Under section 12(2), if conditions are not met, the income is charged to tax. So the exclusion is not unconditional.

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