Electoral Bonds And 8 Facts Associated With Them

 Electoral Bonds And Facts Associated With Them

Recently Jharkhand Mukti Morcha (JMM) , which is also the ruling party of Jharkhand , became the first party to declare the name of a donor who made a contribution through electoral bonds. This article is about the basic facts related to electoral bonds which were introduced in India in 2017 and allowed to issue from 2018. The electoral bond scheme was framed by the central government by exercising powers under RBI Act, 1934. 

What is an Electoral Bond ?

In simple terms , it is a non refundable bond which does not carry the name of buyer or payee and is issued by SBI (only SBI is authorized to issue the bond) . This bond is a financial instrument through which a company, a person , a firm, any agency , (all should be citizens of India or incorporated or established in India) etc can donate funds to any political party. 

What is the validity of these bonds? And What happens to the bond if not issued within validity?

This bond is valid for fifteen days after issuance. The amount to be donated shall be issued in the denomination of 1000 INR, 10,000 INR , 1,00,000 INR , 10,00,000 INR and 1,00,00,000 INR. No amount is required to buy the bond , but the buyer should comply with the KYC ( Know Your Customer) details. If this bond is not cashed within 15 days , all the amount of bond gets deposited into the PM - Relief Fund. 

Which Political Parties are eligible to receive funds ? 

Only the political parties registered under section 29 A of the Representation of the People Act, 1951 ( 43 of 1951) and secured not less than one percent of the votes polled in the last general election ( Loksabha) or the Legislative Assembly ( Vidhan Sabha), as the case may be, shall be eligible to receive  the donation through bond. The bond can be encashed by these parties by depositing the bond  in their designated bank account.  

Which Branches of SBI can issue these bonds in Maharashtra ?

1. Mumbai Main Branch (300)

2. Nagpur (432)

3. Pune Main Branch (454)

When can these bonds be purchased?

In the month of January, April, July and October each year or as specified by the central government.

Is there any  cap on donation amount ?

No, as of now, there is no cap on the donation amount. 

Does this scheme fall under RTI (Right to Information) Act ,2005 ?

No, you cannot file an RTI to know the details of Political Donors. This is where the controversy lies . It will be discussed in detail in the next article.

How much Tax is levied on these bonds ?

No tax is levied, as this is counted under voluntary contribution and exempted under Section 13A of Income Tax Act ,1961

 In the next article ( getting published tomorrow) , the electoral bond controversy, political corruption and way forward will be discussed. Share this article and comment your questions regarding any concept related to the electoral bond . (adsbygoogle = window.adsbygoogle || []).push({});  

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