The Congress party has stirred up a fresh political storm by accusing the Modi government of ignoring a massive tax evasion racket. The party claims this scam runs into thousands of crores of rupees and involves thousands of “fake” political outfits. Here is the full story explained simply.
What Exactly Did Congress Allege?
At a press conference, senior Congress leader Shaktisinh Gohil claimed that more than ₹10,000 crore in black money has been generated using 3,260 Registered Unrecognised Political Parties, commonly called RUPPs. These are parties that are officially registered with the Election Commission but have never contested elections or won any seats. Congress general secretary Jairam Ramesh also joined the attack, asking who the mastermind behind these “sham parties” really is.
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How Is the Alleged Scam Said to Work?
According to Congress, the trick lies in India’s tax laws. Under Sections 80GGB and 80GGC of the Income Tax Act, donations made to political parties are eligible for tax deductions. Gohil alleged that individuals and businesses donated money to these unrecognised parties purely to claim tax benefits. A portion of that donated money, he claimed, was then quietly returned to the donor in cash, after the middlemen kept a commission of roughly 2% to 15%. This effectively lets people avoid paying their real tax dues while making it look like a legitimate political donation on paper.
Why Congress Wants Bigger Action
Gohil pointed out that people earning above ₹5 crore annually can face a tax burden of over 42% once surcharge and cess are added, making such a workaround tempting. He alleged that even though tax authorities have already caught some of these cases, no strict punishment has followed. The law allows for a 200% penalty and jail terms of up to seven years under Sections 276C(1) and 277, but Congress says these have not been used.
What Is Congress Demanding?
Congress has called for a Joint Parliamentary Committee, or JPC, to investigate the entire matter. It also wants criminal cases filed against chartered accountants and party leaders allegedly involved, cancellation of licenses where guilt is proven, and full public disclosure of political donation data.
What Happens Next?
As of now, there has been no official reaction from the government. Whether a JPC is formed will depend on how much political pressure builds in the coming days.
