Political party and electoral trust income exemptions depend on respective donation, reporting and distribution conditions.

A political party registered under section 29A of the Representation of the People Act, 1951 qualifies for exclusion of income from house property, other sources and capital gains, as well as voluntary contributions. It must maintain books and documents sufficient to enable its income to be determined, record the name and address for each voluntary contribution exceeding Rs. 20,000 except contributions by electoral bond, and have its accounts audited by an accountant. Donations exceeding Rs. 2,000 must be received through prescribed banking channels, electronic modes or electoral bonds. An electoral trust's voluntary contributions are excluded if it distributes at least 95% of donations received during the tax year, together with any surplus carried forward from earlier tax years, to political parties registered under section 29A during that year, and functions in accordance with rules made by the Central Government.

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