Gujarat Police File FIRs Against Unrecognised Parties Over Tax Fraud Allegations

Gujarat RUPPs Under Police Lens After Income-Tax Complaints Allege Donation Irregularities

Gujarat police have registered First Information Reports against several Registered Unrecognised Political Parties after complaints from the Income-Tax Department alleged irregularities in political donations and related transactions.

The cases concern allegations that donations routed through banking channels were used to claim tax deductions, before the money was allegedly moved through intermediary firms and returned in cash to donors after commissions were deducted.

Scale of the alleged transactions

With respect to the Bharatiya National Janata Dal, the Swatantrata Abhivyakti Party, and the Garib Kalyan Party, the combined “political donations” are nearly ₹1,870 crore, and the alleged transactions resulted in an estimated tax loss of about ₹560 crore to the exchequer.

Another matter is related to the Satyavadi Rakshak Party, involving ₹415 crore in alleged donations and an estimated Rs.124.5-crore loss, according to news reports.

The largest case concerns the Bharatiya National Janata Dal, with reports saying the party received ₹1,143.85 crore from 56,238 donors, while the estimated alleged tax loss was nearly ₹343 crore.

In the case of the Swatantrata Abhivyakti Party, the alleged donations amount to about ₹519 crore, with the purported tax loss put at about ₹155 crore.

The Garib Kalyan Party case involves donations of ₹206.76 crore and a suspected tax loss of close to ₹62 crore.

Together, the three donation amounts add up to ₹1,869.61 crore.

A separate instance involving the Satyavadi Rakshak Party concerns alleged donations of about ₹415 crore and suspected tax loss of ₹124.5 crore, as per reports.

How the probe reached the police

The Income-Tax Department’s examination of suspected irregularities had begun earlier, before it filed complaints with the police.

On November 12, 2025, the Department conducted searches at the Bharatiya National Janata Dal office in Gandhinagar and at premises linked to its office-bearers.

The searches were carried out under Section 132 of the Income Tax Act.

During its investigation, the agency examined financial and other records before filing complaints with the police.

The police have now registered multiple cases under provisions of the Bharatiya Nyaya Sanhita relating to offences including cheating, criminal conspiracy, forgery, and use of forged documents.

What the Income-Tax Department alleges

According to the complaints, taxpayers transferred money to the political parties through banking channels and received donation receipts.

The donors could then seek deductions for eligible contributions to political parties under Section 80GGC of the Income Tax Act.

The Department has alleged that the money was subsequently routed from these political parties through intermediary firms and finally returned to the donors in cash after commissions were deducted.

The complaints also allege that false accounting records and contribution reports were submitted to the authorities.

A separate description in the complaints says taxpayers first transferred money to a political party through banking channels and received donation receipts.

The funds were then allegedly routed through intermediary firms, with bills or invoices showing purported purchases of foodgrains and other items used to project the transactions as authentic.

The money was subsequently withdrawn in cash and allegedly returned to the original donors after commissions were deducted.

Why Section 80GGC matters

Section 80GGC allows an eligible taxpayer to claim a deduction for the full amount of a qualifying contribution made to a political party or electoral trust, subject to the conditions prescribed under the Income Tax Act.

Contributions made in cash do not qualify for the deduction.

The Income-Tax Department alleges that the purported donations were used to enable taxpayers to claim deductions even though money was later returned to them in cash.

That allegation is central to the complaints because the claimed deductions and the alleged cash return mechanism together form the Department’s case on suspected tax loss.

Electoral activity of the parties

Election Commission records show that a Bharatiya National Janata Dal candidate contested the May 2026 Umreth Assembly by-election and received 773 votes.

The Bharatiya National Janata Dal also contested the 2017 and 2022 State Assembly elections.

The Swatantrata Abhivyakti Party also fielded candidates in the 2022 Gujarat Assembly polls.

The Garib Kalyan Party fielded three candidates in the 2024 Lok Sabha election.

These records show that the parties named in the complaints had some electoral participation, even as the police cases focus on the alleged donation and tax-deduction transactions.

What happens next

The police will examine the money trail and other evidence to determine whether the allegations are substantiated.

The roles of some chartered accountants and professionals are also being scrutinised.

The next stage of the investigation will therefore turn on whether the police can support the Income-Tax Department’s allegations through the money trail, records and other evidence already under examination.

Source: The Hindu