 "Govt says no plan to review rules for political contributions by companies")
New Delhi: Government today said there is no proposal to review the existing provisions regarding the contributions made by companies to political parties.
Responding to a query in the Rajya Sabha on companies’ making contributions to political parties, Minister of State for Corporate Affairs Nirmala Sitharaman said such activitiesare governed by Section 182 of the Companies Act, 2013.
“A company that is not a government company and which is in existence for at least last three financial years may contribute up to 7.5 percent of its average net profits during the last three years to a political party/parties registered under the representation of Peoples Act, 1951,” Sitharaman said in a written reply.
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Under the Income Tax Act, a company can also make contributions within the above limits to Electoral Trust Companies and such amounts need to be included in their books of accounts.
“The Electoral Trust Companies are, however, required to indicate the amounts passed on to them by companies and contributed by them to a political party or parties in the manner laid down in Section 182 (3) of the Companies Act, 2013.
“There is no proposal to review the above arrangements,” the minister said.
To a separate query, Sitharaman said the government has started the process to repeal the Act related to donations of national funds as its relevant provisions have beenincorporated in the new companies law.
The Corporate Affairs Ministry has initiated the process to repeal the Companies (Donations to National Funds) Act, 1951.
“The relevant provisions of the Companies (Donations to National Funds) Act, 1951 have already been incorporated in the Companies Act, 2013.
“Section 181 and 183 of the (Companies) Act allows companies to contribute the bonafide and charitable funds and national funds etc,” she said.
PTI