Cash donation limit
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.
Related concepts
- Money power in elections
- Election expenditure limits
- Star campaigner
- Section 29C of the RPA 1951
- Section 13A of the Income Tax Act 1961
- Corporate donations to political parties
- Foreign funding of political parties
- Electoral trusts