Gujarat Police Book Unrecognised Parties Over Alleged Donation Tax Fraud
FIRs have been filed against several Gujarat RUPPs after I-T complaints alleged donations were returned to donors in cash, causing large tax losses.
The Gujarat police have registered First Information Reports against several Registered Unrecognised Political Parties following complaints from the Income-Tax Department alleging financial irregularities, with the alleged transactions in three cases alone involving donations of nearly ₹1,870 crore and an estimated tax loss of about ₹560 crore.
The cases concern the Bharatiya National Janata Dal, the Swatantrata Abhivyakti Party and the Garib Kalyan Party. A separate matter relates to the Satyavadi Rakshak Party, where alleged donations of about ₹415 crore are under scrutiny, with a suspected tax loss of ₹124.5 crore.
How the investigation began
The Department's examination of suspected irregularities preceded the police complaints. On November 12, 2025, it carried out searches at the BNJD office in Gandhinagar and at premises linked to its office-bearers under Section 132 of the Income Tax Act. Financial and other records were examined before the complaints were filed.
What the complaints allege
According to the complaints, taxpayers transferred money to political parties through banking channels and received donation receipts, which could then be used to claim deductions for eligible contributions under Section 80GGC of the Income Tax Act. The Department has alleged that the funds were subsequently routed through intermediary firms and returned to the donors in cash after commissions were deducted. False accounting records and contribution reports are also alleged to have been submitted.
The amounts involved
The largest case concerns the BNJD, which reportedly received ₹1,143.85 crore from 56,238 donors, with an estimated alleged tax loss of nearly ₹343 crore. In the SAP case, alleged donations total about ₹519 crore and the purported tax loss is about ₹155 crore. The GKP case involves donations of ₹206.76 crore and a suspected tax loss of close to ₹62 crore. The three together add up to ₹1,869.61 crore.
The alleged routing
The complaints describe a process in which funds moved from taxpayers to a political party through banking channels, then through intermediary firms, with bills or invoices showing purported purchases of foodgrains and other items used to make the transactions appear genuine. The money was later withdrawn in cash and allegedly returned to the original donors after commissions were deducted.
Why Section 80GGC matters
Section 80GGC allows an eligible taxpayer to claim a deduction for the full amount of a qualifying contribution to a political party or electoral trust, subject to prescribed conditions. Cash contributions do not qualify. The Department alleges the purported donations were used to help taxpayers claim deductions even though the money was later returned to them in cash.
Electoral activity
Election Commission records show a BNJD candidate contested the May 2026 Umreth Assembly by-election and received 773 votes; the party also contested the 2017 and 2022 State Assembly elections. The SAP fielded candidates in the 2022 Gujarat Assembly polls, while the GKP fielded three candidates in the 2024 Lok Sabha election.
What happens next
Multiple cases have been registered under provisions of the Bharatiya Nyaya Sanhita relating to offences including cheating, criminal conspiracy, forgery and the use of forged documents. Investigators will examine the money trail and other evidence to determine whether the allegations are substantiated. The roles of some chartered accountants and professionals are also being scrutinised.