Millennium Post
Business

Tax evasion: India Inc forms ‘electoral trusts’ to route political funds

The trusts are being set up under a new framework that provides tax benefits for funds extended by corporates to political outfits. The norms require inclusion of the words 'Electoral Trust' in the names.

Five of the trusts were registered in the past one month, according to Corporate Affairs Ministry data. While the Tata conglomerate has set up the Progressive Electoral Trust, the Reliance Group has established the People's Electoral Trust.

The K K Birla group has registered the Samaj Electoral Trust Association while Anil Agarwal-led Vedanta has set up the Janhit Electoral Trust. The Bharti Group has formed the Satya Electoral Trust and the MP Birla Group the Paribartan Electoral Trust. Others registered are Reformative Electoral Trust of India (Delhi), Mahindra Electoral Trust Company, Gauri Welfare Association 'Electoral Trust' and Pratinidhi Electoral Trust.

Companies are rushing to register the trusts as the Lok Sabha elections are coming. Going by government officials and executives at leading consultancy and legal firms, more business houses plan to register electoral trusts. The new structure has been put in place to raise transparency in corporate funding of politics but the names of most of these trusts do not indicate the business groups they're associated with. Some trusts have shared their addresses and the names of directors with certain companies belonging to related groups.
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