Electoral Bonds : Direction From Supreme Court
The Supreme Court recently directed the State Bank of India to stop issuing electoral bonds immediately.
- Electoral bonds are interest-free bearer bonds or money instruments that can be purchased by companies and individuals in India from authorised branches of the State Bank of India (SBI).
- The bonds are similar to bank notes that are payable to the bearer on demand and are free of interest.
- These bonds are sold in multiples of Rs 1,000, Rs 10,000, Rs 1 lakh, Rs 10 lakh, and Rs 1 crore.
- They can be purchased through a KYC-compliant account to make donations to a political party.
- EBs have a life of only 15 days during which it can be used for making donations to political parties.
- The name and other information of the donor are not entered on the instrument and thus electoral bonds are said to be anonymous.
- There is no cap on the number of electoral bonds that a person or company can purchase.
- Under the Income Tax act, one’s electoral bond donations are considered tax-exempt under Section 80 GG and Section 80 GGB.
- Only political parties registered under Section 29A of the Representation of the People Act, 1951 and which secured not less than 1% of votes polledin the last general election to the House of the People or the Legislative Assembly of the State, are eligible to receive electoral bonds.
