Over 3,260 registered unrecognised political parties (RUPPs) received more than ₹10,000 crore electoral donations in two years from 2022 to 2024, with much of it suspected as slush money as they are drained out to shell companies through a complex web of bank accounts.
RUPPs are parties which have been unable to secure sufficient percentage of votes in the Assembly or Lok Sabha polls to become either State or national parties. On May 25, 2022, the ECI specifically stated that 75 per cent of the RUPPs did not contest elections. And more than 90 per cent of them are not filling mandatory compliance reports to Chief Electoral Officers of the States or the ECI for availing tax exemptions.
Under the lens
Sources said the Income Tax department has come across hundreds of bank accounts maintained by these political parties where funds amounting to more than ₹10,000 crore have been collected as donations.
Compare this staggering amount to the monies collected by established national parties – the BJP which, according to the figures provided by the Election Commission in its latest audit reports in January 2025, has a cash and bank balance of ₹7,113.80 crore. The Congress was shown to have ₹857.15 crore.
Sources said the data compiled by the Central Board of Direct Taxes (CBDT) revealed discrepancies in donations paid by taxpayers and voluntary donations received shown by RUPPs which also highlighted misuse of electoral funding, vitiating free and fair elections.
In 2022-23, donors claimed tax exemption, combined under 80GGB and 80GGC of the IT Act, in excess of ₹10,975 crore, the data revealed. In the same period, receipts of donations received declared by political parties were only for ₹4,858 crore. This raised questions over why RUPPs did not also declare ₹6,116 crore donation received.
Alternatively, the high value figure indicated that ₹6,116 crore were funnelled through RUPPs for purposes other than elections.
The dubious use of political funding was reflected in the following year, 2023-24 as well. The excess donations claimed figure, however, came down to half at ₹3,053 crore.
Tax exemption claimed by donors under 80GGB and 80GGC of the IT Act, in this year was ₹9,610 crore while the receipts for donations received shown by political parties went up to ₹6,556 crore if compared with previous year, sources stated.
A detailed questionnaire was mailed to the ECI on March 19, but no response was received till the time of going to press.
Active RUPPs
As per the ECI’s last year data, there are 2,764 active RUPPs in the country, while 282 of them have been ‘delisted’ and another 218 are registered but ‘inactive’.
Not all RUPPs are indulging in activities prejudicial to law. Girish Pandey, who is a retired 1978 batch IRS officer and Founder President of Sarvoday Bharat Party which is a RUPP, told businessline that those violating the law should be prosecuted. “But we, as a party, are against use of political donations for participating in elections,” Pandey said. Pandey contested the 2019 LS polls from Lucknow.
