Electoral Bond Scheme 2018 vide Notification

Govt. notifies Electoral Bond Scheme, 2018 vide Notification No. S.O. 29(E) dated : 2nd January, 2018.

MINISTRY OF FINANCE

(Department of Economic Affairs)

NOTIFICATION

New Delhi, the 2nd January, 2018

S.O. 29(E).—In exercise of the powers conferred by sub-section (3) of Section 31 of the Reserve Bank of India Act, 1934 (2 of 1934), the Central Government hereby makes the following Scheme, namely:-

1. Short title and commencement.–

(1) This scheme may be called the Electoral Bond Scheme, 2018.

(2) It shall come into force on the date of its publication in the Official Gazette.

 2. Definition.– 

In this Scheme, unless the context otherwise requires, ––

(a) “electoral bond” means a bond issued in the nature of promissory note which shall be a bearer banking instrument and shall not carry the name of the buyer or payee;

(b) “authorised bank” means the State Bank of India authorised to issue and encash the bonds in the branches specified in Annexure I to this notification;

(c) “issuing branch” means a designated branch of the authorised bank specified in Annexure I for issuing electoral bonds;

(d) “person” includes-

(i) an individual;

(ii) a Hindu undivided family;

(iii) a company;

(iv) a firm;

(v) an association of persons or a body of individuals, whether incorporated or not;

(vi) every artificial juridical person, not falling within any of the preceding sub-clauses; and

(vii) any agency, office or branch owned or controlled by such person.

3. Eligibility for purchase and encashment of electoral bond.-

(1) The Bond under this Scheme may be purchased by a person, who is a citizen of India or incorporated or established in India.

(2) A person being an individual can buy bonds, either singly or jointly with other individuals.

(3) Only the political parties registered under section 29A of the Representation of the People Act, 1951 (43 of 1951) and secured not less than one per cent of the votes polled in the last general election to the House of the People or the Legislative Assembly, as the case may be, shall be eligible to receive the bond.

(4) The bond shall be encashed by an eligible political party only through a bank account with the authorised bank.

4. Applicability of Know Your Customer Norms.-

(1) The extant instructions issued by the Reserve Bank of India regarding Know Your Customer norms of a bank’s customer shall apply for buyers of the bonds.

(2) The authorised bank may call for any additional Know Your Customer documents, if it deems necessary.

5. Denomination.–

The bonds shall be issued in the denomination of Rs. 1000, Rs. 10,000, Rs. 1,00,000, Rs. 10,00,000 and Rs. 1,00,00,000.

6. Validity of Bond.-

(1) The bond shall be valid for fifteen days from the date of issue and no payment shall be made to any payee political party if the bond is deposited after expiry of the validity period.

(2) The bond deposited by any political party to its account shall be credited on the same day.

7. Procedure for making application for purchase of bonds.–

(1) Every buyer desirous of purchasing bond can apply with a physical or through online applicationin the format specified in Annexure II to this notification.

(2) Every application shall contain particulars as per the format in Annexure-II and shall be accompanied with the specified documents.

(3) On receipt of an application, the issuing branch shall issue the requisite bond, if all the requirements are fulfilled.

(4) The information furnished by the buyer shall be treated confidential by the authorised bank and shall not be disclosed to any authority for any purposes, except when demanded by a competent court or upon registration of criminal case by any law enforcement agency.

(5) A non-Know Your Customer compliant application or an application not meeting the requirements of the scheme shall be rejected.

(6) The bond shall be issued to the buyer on non-refundable basis.

8. Periodicity of issue of bonds.-

(1) The bonds under this Scheme shall be available for purchase by any person for a period of ten days each in the months of January, April, July and October as may be specified by the Central Government.

(2) An additional period of thirty days shall be specified by the Central Government in the year of general elections to the House of People.

9. Interest.–

No interest shall be payable on the bond.

10. Issuing offices and commission payable.-

No commission, brokerage or any other charges for issue of bond shall be payable by the buyer against purchase of the bond.

11. Payment options.-

(1) All payments for the issuance of the bond shall be accepted in Indian rupees, through demand draft or cheque or through Electronic Clearing System or direct debit to the buyer’s account.

(2) Where payment is made through cheque or demand draft, the same shall be drawn in favour of the issuing bank at the place of issue such bond.

12. Encashment of the bond.-

(1) The bond can be encashed only by an eligible political party by depositing the same in their designated bank account.

(2) The amount of bonds not encashed within the validity period of fifteen days shall be deposited by the authorised

bank to the Prime Minister Relief Fund.

13. Tax treatment.–

The face value of the bonds shall be counted as income by way of voluntary contributions received by an eligible political party, for the purpose of exemption from Income-tax under section 13A of the Income-tax Act, 1961.

14. Trading of bonds.–

The bonds shall not be eligible for trading.

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