Contributions to political parties are governed by Section 182 of the Companies Act, 2013. A company that is not a Government company and which is in existence for at least last three financial years may contribute up to 7.5% of its average net profits during the last three years to a political party/parties registered under the representation of Peoples Act, 1951. This is subject to further elaborations, disclosures and restrictions in the said section. A company can also make contributions within the above limits and restrictions to ‘Electoral Trust Companies’ and reflect these contributions in their books of accounts. The provisions of Section 182 are not applicable to foreign companies.

This was stated by Shri Arjun Ram Meghwal, Minister of State for Corporate Affairs in written reply to a question in Lok Sabha.

Corporate political contributions limited by law; eligibility, disclosure and procedural restrictions govern donations to parties and electoral trusts. Section 182 of the Companies Act, 2013 permits a non-government company with at least three years' existence to contribute up to a statutory proportion of its average net profits for the preceding three years to registered political parties or electoral trusts, subject to eligibility, disclosure, accounting and other restrictions; the provision does not apply to foreign companies.