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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, which statement about the income of political parties and electoral trusts is correct?

Section 12 excludes income enumerated in Schedule VIII from the total income of political parties and electoral trusts, subject to the specified conditions. If the conditions are not satisfied in a tax year, that income is charged to tax for that year.

  1. ATheir income is governed by section 11 and Schedule VII only
  2. BIncome enumerated in Schedule VIII is excluded from total income subject to conditions, and is taxed if the conditions are not metCorrect
  3. CTheir income is classified under a separate sixth head of income
  4. DTheir income enumerated in Schedule VIII is exempt even if conditions are not satisfied

Explanation

Section 12(1) excludes income enumerated in Schedule VIII from the total income of political parties and electoral trusts, subject to its conditions. Under section 12(2), income for which conditions are not satisfied is charged to tax. Section 13 lists only five heads, so no sixth head exists.

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