Supreme Court Notifies 5-Judge Bench To Hear Electoral Bonds Case On October 31

The case involves a batch of petitions challenging the amendments introduced by the Finance Act 2017 paving the way for the anonymous electoral bonds scheme. Earlier, CJI Chandrachud had agreed to hear the petitions -which were filed in 2017- after the petitioners urged that the matter be heard before the upcoming general elections.

The Finance Act 2017 introduced amendments in Reserve Bank of India Act, Companies Act, Income Tax Act, Representation of Peoples Act and Foreign Contributions Regulations Act to make way for the electoral bonds.

By virtue of the 2017 amendment made to Section 29C of the Representation of Peoples Act 1951(RPA), a donor may buy an electoral bond at specified banks and branches using electronic modes of payment and after having completed the KYC (know your customer) requirements. However, political parties are not required to disclose the source of these bonds to the Election Commission of India (ECI). The bonds can be bought for any value, in multiples of Rs 1,000, Rs 10,000, Rs 1 lakh, Rs 10 lakh or Rs 1 crore. The name of the donor will not be there in the bond. The bond will be valid for 15 days from the date of issue, within which it has to be encashed by the payee-political party. The face value of the bonds shall be counted as income by way of voluntary contributions received by an eligible political party, for the purpose of exemption from Income-tax under Section 13A of the Income Tax Act, 1961.