In a massive crackdown, the Income Tax Department has unearthed a Rs. 5,500 crore fake political donations racket involving 36 shell political parties and over 1.6 lakh bogus donors. The investigation has revealed an elaborate money-laundering scheme where funds were allegedly round-tripped through fake donations to claim fraudulent tax deductions.
According to officials, the operation was part of a coordinated effort by certain intermediaries who created fictitious political entities registered under Section 29C of the Representation of the People Act. These shell parties received large sums of money through banking channels, purportedly as political donations. However, the funds were subsequently siphoned back to the original contributors after deducting a commission — enabling them to illegally claim tax benefits under Section 80GGC of the Income Tax Act.
Preliminary findings indicate that more than ₹4,400 crore worth of bogus deductions were claimed using these fabricated transactions. The department has identified several companies and individuals who allegedly participated in the scheme to convert unaccounted income into legitimate tax-exempt political donations.
Sources stated that the probe was launched after data analytics flagged unusual patterns of donations to obscure political outfits with minimal or no electoral activity. Raids conducted across multiple states led to the seizure of digital evidence, documents, and bank records linking the fake donors to the political entities.
Read More: Scrap Seizure Case: Jharkhand High Court Grants Anticipatory Bail to Scrap DealerÂ
