CBDT targets bogus deductions routed through unrecognised political parties

What happened

• CBDT acted against intermediaries who filed returns with bogus deduction claims on commission, many routed as donations to Registered Unrecognised Political Parties (RUPPs) or charities [PIB].
• Many RUPPs were non-filers, not working at their registered address and doing no political work; they were used for hawala, cross-border remittances and fake donation receipts. SMS and e-mail alerts went to taxpayers from 12 December 2025 under the NUDGE campaign [PIB].

Background

• Donations to political parties are deductible under the Income Tax Act. NUDGE (Non-intrusive Usage of Data to Guide and Enable) asks taxpayers to correct returns themselves.

Why it matters

• The case shows how weak oversight of small registered parties can become a tax and money-laundering problem. The ECI has been delisting such parties.