Electoral Trust Registration

Governed by the Electoral Trusts Scheme 2013, notified by the Central Board of Direct Taxes (CBDT) under Section 2(22AAA) read with Section 13B, Income-tax Act 1961. Only a company registered under Section 8, Companies Act 2013 (the not-for-profit company structure that succeeded Section 25 of the Companies Act 1956), with the sole object of distributing the contributions it receives from other companies and individuals to political parties, is eligible to apply to the CBDT for approval as an Electoral Trust, using Form A under the Scheme. Once approved, voluntary contributions received by the trust are exempt from tax under Section 13B, provided the trust distributes at least 95% of the aggregate contributions received in a financial year — together with any surplus brought forward from an earlier year — to political parties registered under Section 29A, Representation of the People Act 1951, before the end of that same financial year, and otherwise functions in accordance with the Scheme's rules on donor disclosure, permissible administrative expenses, and periodic renewal of CBDT approval.

An electoral trust is a trust set up to receive voluntary contributions and distribute them to political parties, as defined in Section 2(22AAA) of the Income Tax Act 1961 and regulated under the Electoral Trusts Scheme notified by the Central Government. Only registered electoral trusts can receive the contributions eligible for the donor's deduction, and the trust must distribute its receipts to eligible political parties within the prescribed period. Registration is applied for under the Scheme in the prescribed form to the prescribed authority (VERIFY: the application form and authority under the Electoral Trusts Scheme).

For corporate donors, the electoral trust is the tax-efficient route for political contributions: donations by a company to an electoral trust qualify for the deduction under Section 80GGB of the Income Tax Act, and the trust's distribution to political parties keeps the money in the compliant channel. The trust itself must run within the Scheme's rails — the receipt of contributions, the investment, the distribution and the accounts are all governed by the Scheme.

The failure mode is the trust drifting outside the Scheme: contributions received without registration, distributions delayed or made to ineligible parties, or accounts that do not show the full flow. Each deviation puts the trust outside the exemption and exposes the donors' deductions — a political contribution that loses its 80GGB deduction is a compliance failure the donor will not forget.

This service is for companies and individuals setting up or operating electoral trusts. We prepare the trust documentation under the Electoral Trusts Scheme, apply for registration in the prescribed form, set up the contribution and distribution accounting, manage the annual compliance — the accounts, the returns and the statutory filings — and keep the trust within the Scheme so every contribution stays deductible under Section 80GGB.