Cash donation limit

Polity & Governance glossary

Topic: Electoral Reforms: Money, Criminalisation and Simultaneous Elections · NCERT: Beyond NCERT

Meaning

Since 2017, a political party cannot take a cash donation of more than ₹2,000 from one source. Anything larger must come by cheque, bank transfer or other traceable means. The rule is linked to the party's income-tax exemption. The aim is to cut anonymous black money in party funds, because cash leaves no paper trail.

Example

A supporter who wants to give a party ₹10,000 cannot hand it over in cash. They must pay through a bank. If the gift is above ₹20,000, the party must also report it to the ECI under Section 29C of the RPA 1951.

Don't confuse with

  • The ₹20,000 reporting threshold (Section 29C): that is the level above which a party must report a donation to the ECI. The ₹2,000 limit is about the mode of payment (no cash above it), not about reporting.

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