Electoral trusts can’t take funds from PSUs or foreign sources

NEW DELHI: Electoral trusts will not be able to accept foreign funds or contributions from public sector companies, according to new rules notified by the Central Board of Direct Taxes ( CBDT).

The new rules will prevent state-owned companies and foreign sources such as trusts and foundations from contributing money to electoral trusts that are formed to fund political parties.

Foreign source for the purpose of these rules would include foreign government, trust or foundation, society, club or other associations registered overseas.

It would also include companies in which more than 50% of shares is held by foreigners, as well as trade unions, trusts, and societies or associations of individuals registered abroad.

Earlier, electoral trusts were not allowed to accept funding from an individual who is not a citizen of India, or from any foreign entity. Also, they were barred from getting contributions from other electoral trusts set up under the Electoral Trusts Scheme, 2013.

Electoral trusts are not-for-profit companies and distribute contribution received from various sources to political parties.