Q. Consider the following statements:
1.Political parties registered under Section 29A of the Representation of the People Act, 1951 are required to pay taxes on their income derived from house property, and capital gains.
2.The Chief Executive Officer of the political party bears the responsibility for filing the income tax return.
Which of the statement(s) given above is/are correct?
Answer: B
Notes:
Statement 1 is incorrect. Political parties registered under Section 29A of the Representation of the People Act, 1951 are not required to pay taxes on their income, including income derived from house property, and capital gains. Under Section 13A of the Income Tax Act, 1961, political parties are given 100% tax exemption.
Statement 2 is correct. Although political parties are exempted from paying taxes, they are still required to file their income tax returns. It is the responsibility of the Chief Executive Officer of the political party to file the return of income and also to sign and verify the same.
Source: Forum IAS
