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

Which of the following is one of the conditions a registered political party must satisfy under Schedule VIII of the Income-tax Act, 2025 to keep its specified income out of total income?

A registered political party must have its accounts audited by an accountant, among other conditions such as maintaining books, keeping contributor records above ₹ 20,000 and filing its return on time. The 95% distribution requirement applies only to electoral trusts.

  1. AIts accounts must be audited by an accountantCorrect
  2. BIt must distribute 95% of its donations to other parties
  3. CIt must invest all contributions in Government securities
  4. DIt must register as an electoral trust

Explanation

Condition (c) for a political party requires that its accounts be audited by an accountant. The 95% distribution rule applies to electoral trusts, not parties. No investment requirement or electoral trust registration is prescribed for parties.

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