Supreme Court (SC) strikes down the Electoral Bonds Scheme (EBS) as ‘unconstitutional’

Posted 16 Feb 2024

Updated 22 Mar 2024

1 min read

SC ruled that,
- Anonymous electoral bonds are violative of the Right to Information (RTI) under Article 19(1)(a).
- Court also quashed the amendments made to the Income Tax Act and the Representation of People Act 1951 which made the donations anonymous.
- Amendments to Companies Act 2013 provision allowing unlimited corporate contributions is arbitrary and violative of Article 14.
About Electoral Bonds Scheme (EBS):
- Finance Act 2017 introduced EBS that allowed corporations and individuals to anonymously donate money to political parties by purchasing electoral bonds from the SBI.
- Electoral bonds are interest-free bearer instruments like Promissory Notes, with 100% tax exemption.
  - They are issued in multiples of Rs 1,000, Rs 10,000, Rs 1 lakh, Rs 10 lakh, and Rs 1 cr.
  - A citizen of India or a body incorporated in India is eligible to purchase the bond.
- It was proposed as a measure to address the lack of transparency in political parties' funding and curbing black money.
Issues related to EBS:
- As per RBI, shell companies may misuse bearer bonds for money laundering transactions.
- Unlimited and anonymous corporate funding infringes the principle of free and fair elections.

Watch News Today

Need to Login First !