Electoral and Party Finance Reform

Parties in India raise money for both elections and inter-election purposes through private donations, the bulk of which are believed to be unaccounted for despite recent incentives for transparency in the Election and Other Related Laws (Amendment) Act of 2003, which introduced tax-deductibility for political donations against receipts. While parties are tax-exempt, they have to file income tax returns. However, these declarations are thought to be understatements.