New Delhi, November 24, 2025 – The Supreme Court issued notice in a public interest petition challenging the constitutionality of Section 13A(d) of the Income‑tax Act, 1961, which permits political parties to receive cash donations up to ₹2,000 without disclosing donor details. A bench of Justice Vikram Nath and Justice Sandeep Mehta sought responses from the Election Commission of India and the Union government within four weeks.
Key Features of the Petition
– Filed by Khem Singh Bhati.
– Challenges Clause (d) of Section 13A of the Income-tax Act.
– Argues that anonymous cash contributions undermine transparency in political funding.
– Cites the prevalence of digital payments (e.g., UPI) as reason cash limits are outdated.
Reliefs Sought
1. Strike down Section 13A(d) as unconstitutional.
2. Direct ECI to audit Form 24A reports of all recognised national and state parties.
3. Prohibit political parties from accepting any cash contributions.
4. Instruct CBDT to scrutinise ITRs and audit reports of political parties for the past five years and take action for violations.
Significance of the Case
The petitioner argues that allowing cash donations up to ₹2,000 facilitates undisclosed political funding and violates transparency principles emphasised in the 2024 Supreme Court verdict striking down the electoral bonds scheme.
Legal Background
Section 13A exempts the income of political parties from taxation if conditions are met, including maintaining proper records and avoiding cash donations exceeding ₹2,000. The ₹2,000 cash cap was introduced by the Finance Act, 2017, effective April 1, 2018.
What Happens Next
The Supreme Court will hear the matter after receiving responses from the Centre, ECI, and political parties within four weeks.