The newly proposed Income Tax Bill, 2025, has drawn attention for its unexpected inclusion of provisions related to electoral bonds, despite the Supreme Court having declared them unconstitutional last year. Experts are now debating the implications of this move, with some suggesting it could be a legislative oversight, while others speculate it might signal the government’s intention to reintroduce the scheme in a modified form.
Electoral bonds, which allow anonymous donations to political parties, were struck down by the Supreme Court in February 2024, citing concerns about transparency and their potential to violate the right to information.
Electoral bonds, introduced by the government in 2017, were designed to facilitate anonymous donations to political parties. However, the Supreme Court struck down the scheme in February 2024, citing concerns about transparency and potential misuse.
However, the new Income Tax Bill, which aims to overhaul the existing Income Tax Act, includes electoral bonds in its Schedule VIII, which deals with “Income not to be included in the total income of political parties and electoral trusts.”
The government has yet to provide an official explanation for the inclusion of electoral bonds in the bill. However, sources suggest that the government might be exploring ways to address the concerns raised by the Supreme Court while still allowing for some form of anonymous political funding.
The Income Tax Bill is currently under review by a select committee of the Lok Sabha, which is expected to submit its report by March 10th. It remains to be seen whether the committee will recommend any changes to the provisions related to electoral bonds.
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