Supreme Court to examine plea seeking ban on cash donations to political parties

The Supreme Court on Monday (November 24, 2025) agreed to consider a petition demanding a complete halt to cash contributions — even those up to ₹2,000 — made to political parties. The plea argues that every rupee donated, regardless of the amount, should fall under the income tax framework to ensure full transparency.

A Bench comprising Justices Vikram Nath and Sandeep Mehta issued notices on the petition, which insists that the Election Commission of India (ECI) should not exempt political parties from revealing cash donations below ₹2,000. Instead, parties should be forced to disclose complete information about all their donors.

According to the plea, “Political parties must reveal the identity and full details of every person contributing any amount, and no contribution should be accepted in cash in the interest of transparent political financing.”

Besides the ECI, the petition names the Union government, the Central Board of Direct Taxes, and 13 political parties—including the BJP, Congress, DMK, CPI(M), Trinamool Congress, Samajwadi Party, and AAP—as respondents.

Filed by Khem Singh Bhati and represented by senior advocate Vijay Hansaria (with advocate Jayesh K. Unnikrishnan submitting), the petition challenges clause (d) of Section 13A of the Income Tax Act, 1961. This section grants political parties tax exemptions, while clause (d) permits them to receive donations of up to ₹2,000 in cash.

The petitioner stresses that no cash contribution should be allowed at all, as cash transactions undermine transparency.

The plea argues that Section 13A(d) creates a loophole: a wealthy, unidentified donor could divide a huge sum into several cash payments under ₹2,000 and route it through different individuals or fronts, especially in an age dominated by digital payments.

It further claims that Section 13A(d) violates Article 19(1)(a) of the Constitution because allowing cash donations below ₹2,000 deprives voters of their right to know the financial sources of political parties. Voters, it contends, deserve full disclosure of all contributions so they can cast their votes with awareness of who funds which party.

The Court agreed to list the matter for hearing in the next two to three weeks.

The petition also asks the Supreme Court to direct the ECI to thoroughly examine Form 24A contribution statements of national and regional parties, and to instruct political parties to deposit any amount for which PAN or address information is missing.

Form 24A is the annual document political parties must submit to claim tax exemption on voluntary contributions. It lists donations above ₹20,000 and is intended to strengthen transparency in political funding.

Additionally, the plea requests that the ECI issue show-cause notices under paragraph 16A of the Election Symbols Order, 1968, to parties that fail to file Form 24A on time, questioning why their reserved election symbols should not be suspended or withdrawn. It also demands that party accounts be audited by independent auditors appointed by the ECI, not by the parties themselves.

The petition highlights that many contribution and audit reports are delayed, incomplete, or lacking important details. For example, CPI(M) reportedly filed its contribution report 43 days late, BJP by 42 days, and Congress by 27 days. In several cases, Form 24A filings omitted donor addresses, PAN information, and bank particulars.

It adds that numerous parties have declared significant earnings from bank interest but have not provided details of bank accounts or deposits. Many have also recorded large sums under “fees” and “subscriptions” without any donor-specific information.