1.7.

ELECTORAL TRUST
What is Electoral Trust?
Electoral Trust is a company or a non-profit company created in India under
Section 8 of the Companies Act for orderly receipt of the voluntary contributions
from any person and for distributing the same to the respective political parties,
registered under Section 29A of the Representation of People Act, 1951.
Examples of Corporate Trusts: Bharatiya Socialist Republican Electoral
Trust, Bajaj Electoral Trust and Jankalyan Electoral Trust, Progressive Electoral
Trust (Tata), Peoples Electoral Trust( Reliance Industries), Janhit Electoral Trust,
Satya Electoral Trust
Corporates are entitled for tax benefits with regard to electoral trusts subject
to certain conditions.
The benefits can be availed only if the trusts distribute 95% of the total
contributions received in a particular fiscal to registered political parties in that
same year itself.
These entities are barred from receiving donations in cash. Foreign citizens are
not allowed to contribute money to the trusts.
Objective
The objective of the Electoral Trust is not to earn any profit or pass any direct or
indirect benefit to its members or contributors.
The sole objective is to distribute the contributions received by it to the political
party concerned.
This is a mechanism for bringing transparency and sanity in the political party
funding.
Why do corporates and politicians prefer electoral trusts?
It spares them the embarrassment of baring their political leanings
(maintaining anonymity).
It also spares them the resultant pain of retribution by the political party not
benefiting from the companys munificence.
Even Political parties lack anonymity.