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If you thought it was the corporate sector that largely funds political parties, think again.
Individuals contributed about four times as much money as did corporates, at least on the record, the Budget papers reveal.
Under Section 80GGC and 80 GGB of the Income-Tax Act any person or company except a local authority or institution wholly or partly funded by the Government can deduct from their taxable incomes on any contribution made to a political party.
The Budget documents, which note the tax revenues foregone under this clause, reveal that individuals avoided paying an estimated Rs 191 crore in taxes in the current year because they donated money to a registered political party. Given the tax rates, they would have contributed no less than Rs 570 crore.
Companies, on the other hand, took less advantage of this exemption; they saved only Rs 51 crore in taxes.
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