Congress alleges ₹10,000 crore tax evasion scam via fake political parties

The Congress party has accused the Modi government of overlooking a massive tax evasion scheme involving approximately ₹10,000 crore. The allegations center on 3,260 Registered Unrecognised Political Parties (RUPPs) that are officially registered with the Election Commission but have reportedly never contested elections or won seats.

According to Congress leaders Shaktisinh Gohil and Jairam Ramesh, the alleged scam exploits tax laws regarding political donations. Under Sections 80GGB and 80GGC of the Income Tax Act, donations to political parties are tax-deductible. The party claims that individuals and businesses donate money to these sham parties to claim tax benefits, only to have a portion of the funds returned to them in cash after middlemen take a commission of between 2% and 15%.

Congress has demanded a Joint Parliamentary Committee (JPC) probe to investigate the matter. The party criticized the government for failing to impose the maximum 200% penalties or initiate criminal proceedings against those involved, despite the scale of the alleged evasion.