Congress Demands JPC Probe Into Alleged ₹10,000 Crore Tax Evasion Racket

The Indian National Congress on Wednesday demanded a Joint Parliamentary Committee probe into an alleged 10,000 crore rupee tax evasion scheme operating through thousands of registered unrecognised political parties. Addressing a press conference in New Delhi, Congress MP Shaktisinh Gohil alleged that 3,260 unrecognised political parties were being utilized as financial channels to round-trip unaccounted money into legitimate funds under the patronage of the ruling Bharatiya Janata Party.

The opposition party asserted that despite a non-governmental organisation report alerting authorities to systemic fraud in 2025 and subsequent observations by tax appellate bodies, the government failed to execute criminal prosecutions or impose statutory penalties. Congress general secretary in-charge communications Jairam Ramesh questioned who served as the "Chanakya" behind the "sham political parties" and who was the "true mastermind" of the alleged scheme. Government officials and BJP representatives offered no immediate reaction to the allegations.

The mechanics of the alleged tax evasion rest upon specific provisions of the Income Tax Act that govern deductions for political contributions. Under Section 80GGC of the Income Tax Act, an individual taxpayer who donates funds to a registered political party receives a 100 percent deduction on that amount, effectively reducing their taxable income liability to zero. Similarly, Section 80GGD allows corporate entities to claim complete tax deductions for monetary contributions made to registered political organizations.

According to Congress leadership, these statutory tax exemptions were systematically exploited by thousands of paper entities that issued official donation receipts without participating in electoral contests or conducting genuine political operations. Gohil stated that 3,260 registered unrecognised political parties accumulated approximately 10,000 crore rupees in total contributions. The Income Tax Appellate Tribunal had separately observed that such widespread tax evasion through fraudulent political donations was fatal for national financial security and weakened the country's economy, yet central authorities issued no enforcement directives.

The opposition detailed an operational arrangement in which sham political parties served as financial intermediaries for high-net-worth individuals and corporate entities. Gohil claimed that these 3,260 unrecognised parties retained between 2 percent and 15 percent as a commission for facilitating the transaction, returning the remaining balance to the original donors in cash. Calling these entities the "C-team" of the ruling party, Congress leaders asserted that the organizations functioned to convert black money into legitimate funds while insulating primary political beneficiaries.

Ramesh drew a direct contrast between the treatment accorded to unrecognised parties and the enforcement actions directed at established opposition groups. He recalled that prior to the 2024 Lok Sabha elections, the Indian National Congress had its bank accounts frozen and was hit with substantial tax notices in an attempt to financially cripple the principal opposition party. Ramesh asked why "there is no investigation into these 3,260 sham political parties and the associated cases of tax evasion", questioning whether the entities enjoyed political patronage from the ruling administration.

A central component of the Congress allegations involved the role of auditing professionals in validating the accounts of non-operational political entities. Gohil stated that chartered accountants played a major role in enabling the tax evasion scheme by certifying fraudulent financial disclosures. Income tax officers had previously recognized these violations and explicitly recommended taking punitive action against involved auditors, but no formal orders were issued by senior government authorities.

To address the alleged fraud, the Congress demanded the immediate application of Section 270A(9) and Section 2A of the Income Tax Act, which authorize a 200 percent penalty on under-reported income resulting from misrepresentation. The party also demanded that criminal cases be filed against implicated chartered accountants under Sections 276C(1) and 277 for willful attempts to evade tax and making false statements in verification. Gohil urged regulatory bodies to revoke the professional practice licences of any accountants found guilty by courts of law.

The controversy extended to the supervisory role of the Election Commission of India in monitoring political party finances. Gohil noted that state election officers hold statutory responsibility for auditing donation disclosures and annual expenditure filings submitted by political parties. He questioned whether the election body was functioning independently, marking a rare public challenge to an institution traditionally viewed as an autonomous watchdog.

The Congress linked its critique of the election watchdog to recent legislative changes governing the appointment of the Chief Election Commissioner and Election Commissioners. Gohil pointed out that the appointment committee previously comprised the Prime Minister, the Leader of the Opposition, and the Chief Justice of India. The Modi government subsequently removed the Chief Justice of India from the panel and replaced the judicial representative with a central Cabinet minister, Union Home Minister Amit Shah, which Congress alleged allows the executive branch to exercise decisive control over poll panel appointments.

Outlining its concrete demands, the Congress called for the immediate constitution of a Joint Parliamentary Committee to conduct a comprehensive probe into the financial activities of all 3,260 registered unrecognised political parties. The party demanded that the central government place all data concerning election-related donations into the public domain to ensure full transparency regarding corporate and individual political funding.

Gohil insisted on launching criminal prosecutions against leaders and managers running non-operational political organizations. The party also demanded that the Union government publish official records specifying how many individuals associated with the 3,260 alleged sham political parties later joined the Bharatiya Janata Party. With no formal response yet issued by the government, the opposition plans to pursue the issue through parliamentary requests and public disclosures.