Context:
Electoral Trust Contribution reports released by the Election Commission of India (ECI) for the FY 2023-24, indicate a significant increase in donations to political parties through electoral trusts.
Electoral Trusts:
- Introduced in 2013 as non-profit entities designed to collect funds from donors and distribute them to political parties.
- Regulated under – Companies Act, 1956.
- Entities eligible for giving donations –
- Indian citizens
- Companies registered in India
- Firms
- Hindu Undivided Families (HUF)
- Associations of persons residing in India
- Donor Requirements – Donors must provide their PAN (for residents) or passport number (for NRIs) when making contributions.
- Donations to Political Parties – Electoral trusts must donate at least 95% of the funds they receive in a financial year to eligible political parties registered under the Representation of the People Act, 1951.
- Registration and Renewal – Electoral trusts are required to apply for renewal every 3 financial years to continue their registration and operations.
Key Differences Between Electoral Bonds and Electoral Trusts:
| Feature | Electoral Bonds | Electoral Trusts |
| Regulation | Primarily regulated by the RBI, SBI, and Election Commission. | Regulated by the Companies Act, monitored by the Election Commission and Income Tax Department. |
| Purpose | Aims to streamline donations while maintaining donor anonymity. | Focuses on aggregating donations and ensuring transparency. |
| Tax Benefits | Donors can avail deductions under Income Tax Act | Donors receive tax deductions for donations through the Trust. |
| Operational Mechanism | Donations are made directly to political parties via bonds. | Trusts collect funds and distribute them to political parties. |
| Donor Disclosure | Donors’ identities remain undisclosed. | Donors’ identities are publicly disclosed. |
| Transparency | Anonymity of donors and recipients; concerns over undisclosed corporate influence. | Full disclosure of donors and recipients details to the public. |
Read more about Electoral Bonds Scheme
Source: IE
Previous Year Question
For election to the Lok Sabha, a nomination paper can be filed by
[UPSC Civil Service Exam – 2017 Prelims]
(a) anyone residing in India.
(b) a resident of the constituency from which the election is to be contested.
(c) any citizen of India whose name appears in the electoral roll of a constituency.
(d) any citizen of India
Answer: (c)
