The Indian Constitution promises equality before the law. Yet in recent years, the income tax department’s application of Section 13A—which governs the exemption of political party income from taxation—has raised uncomfortable questions about whether this principle applies uniformly or selectively.
The answer lies in a case that deserves far wider attention than it has received: the assessment of the Indian National Congress for FY17-18. The department took an unambiguous position. The INC filed its income tax return on 2 February 2019, after the extended due date of 31 December 2018. This single fact—the breach of a filing deadline—became grounds for denying the party its entire Section 13A exemption. The income tax appellate tribunal (ITAT) upheld this decision in a 2025 judgment with striking clarity: the moment a political party violates the “due date” requirement, Section 13A Third Proviso is automatically triggered, and the exemption is forfeited entirely. The INC was rendered liable to pay tax on ₹199.15 crore in donations received, with interest and penalties pushing the cumulative demand to over ₹135 crore.
This interpretation is legally sound. Section 13A is a fiscal statute, and exemption provisions must be read strictly, not liberally. Compliance with filing deadlines is not a formality—it is a hard legal boundary. Cross it, and you lose the exemption. The Congress case established this principle with judicial finality.
The Inconsistency: Other Parties, Same Violations
But here is the problem: Has this principle been applied consistently to all recognised national political parties?
The answer, based on publicly available data from the election commission of India (ECI), appears to be no.
For FY23-24, several major national parties filed their audited annual accounts and contribution reports with the ECI after the prescribed deadlines:
• Indian National Congress (INC): Filed 53 days late
• Bharatiya Janata Party (BJP): Filed 66 days late
• Communist Party of India (Marxist) [CPI(M)]: Filed 12 days late
The Aam Aadmi Party (AAP) and Bahujan Samaj Party (BSP) filed on time. For the current financial year (2024-25), the central board of direct taxes (CBDT) extended the deadlines for audited account filings to 10 November 2025 and for income tax returns to 10 December 2025. The ECI correspondingly adopted these extended dates for political parties. Those deadlines have now passed. It is therefore objectively verifiable from ECI records whether each major party has complied.
The Constitutional Question: Equality Before Law
The question is stark: If late filing of returns and audited accounts results in denial of Section 13A exemption for Congress, why should it not result in the same consequence for BJP, CPI(M), or any other party that has similarly defaulted?
The answer cannot be that different rules apply to different parties. That would be discrimination, plain and simple. And it would violate two cornerstone principles of the Indian Constitution: Article 14 (equality before law) and Article 16 (equal opportunity in public employment and administration of the State).
To be clear, this representation is neither pro-Congress nor anti-BJP, nor does it favour any other party. The point is not about which party the law should favour. The point is about whether we have a rule of law at all. A “rule of law” that is applied strictly to one political party and indulgently to another is not a rule of law—it is the rule of discretion, which is the hallmark of arbitrary power.
The Case for Consistency
The income tax department deserves credit for taking a firm stand in the Congress case. That stand reflected a clear interpretation of the statute: exemption under Section 13A comes with conditions, and those conditions are non-negotiable. But credit must be accompanied by consistency. If the department believes—as the Congress judgment suggests—that late filing is grounds for denial of exemption, then it must act on that belief uniformly.
The Path Forward: A Uniform Standard
There is a way forward. The department of revenue and the CBDT should issue a clear direction to all field formations:
First, obtain from the ECI an authenticated list of all recognised national political parties and the actual dates on which they filed their audited accounts and contribution reports for FY23-24 and FY24-25.
Second, in every assessment of a recognised national political party for these years, the assessing officer should verify whether the statutory conditions of Section 13A—including timely filing of returns and timely submission of audited accounts to the ECI—have been met.
Third, where such conditions have been breached, deny the exemption and bring the entire income to tax, along with applicable interest and penalty, in exactly the same manner as was done in the Congress case.
Fourth, issue a circular to ensure that this uniform standard is applied across all field formations, eliminating any room for differential treatment.
In Summary: The Rule of Law Cannot Be Selective
This is not a revolutionary proposal. It is simply a call for the law to be applied as it is written, to all subjects equally. Democracy depends on this. Public confidence in the tax administration depends on this. And the Constitution demands it.
The Congress case has set a precedent. That precedent should serve as the floor for all political parties, not a ceiling applied selectively. The income tax department has already articulated the principle. Now it must have the courage to live by it, uniformly and impartially, regardless of which party is being assessed.
The rule of law is not compromised by strict application. It is compromised by selective application or scrutiny. Let us choose consistency over convenience, and equality over expediency.
(Karan Bir Singh (KBS) Sidhu is a retired IAS officer and former special chief secretary, government of Punjab. He holds a Master’s degree in Economics from the University of Manchester, UK. He writes at the intersection of global trade negotiations, Trump-era tariff shocks, and contemporary geopolitics.)
The answer is obvious but who can bell the cat?