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Section 182

Prohibitions and restrictions regarding political contributions

(1)
Notwithstanding anything contained in any other provision of this Act, a company, other than a Government company and a company which has been in existence for less than three financial year, may contribute any amount directly or indirectly to any political party:
Proviso

Provided that the amount referred to in sub-section ( 1 ) or, as the case may be, the aggregate of the amount which may be so contributed by the company in any financial year shall not exceed seven and a half per cent. of its average net profits during the three immediately preceding financial years:

Proviso

Provided further that no such contribution shall be made by a company unless a resolution authorising the making of such contribution is passed at a meeting of the Board of Directors and such resolution shall, subject to the other provisions of this section, be deemed to be justification in law for the making and the acceptance of the contribution authorised by it.

(2)
Without prejudice to the generality of the provisions of sub-section ( 1 ),—
(a)
a donation or subscription or payment caused to be given by a company on its behalf or on its account to a person who, to its knowledge, is carrying on any activity which, at the time at which such donation or subscription or payment was given or made, can reasonably be regarded as likely to affect public support for a political party shall also be deemed to be contribution of the amount of such donation, subscription or payment to such person for a political purpose;
(b)
the amount of expenditure incurred, directly or indirectly, by a company on an advertisement in any publication, being a publication in the nature of a souvenir, brochure, tract, pamphlet or the like, shall also be deemed,—
(i)
where such publication is by or on behalf of a political party, to be a contribution of such amount to such political party, and
(ii)
where such publication is not by or on behalf of, but for the advantage of a political party, to be a contribution for a political purpose.
(3)
Every company shall disclose in its profit and loss account the total amount contributed by it under this section during the financial year to which the account relates.
(3A)
Notwithstanding anything contained in sub-section (1), the contribution under this section shall not be made except by an account payee cheque drawn on a bank or an account payee bank draft or use of electronic clearing system through a bank account:
Proviso

Provided that a company may make contribution through any instrument, issued pursuant to any scheme notified under any law for the time being in force, for contribution to the political parties.

(3)
Every company shall disclose in its profit and loss account any amount or amounts contributed by it to any political party during the financial year to which that account relates, giving particulars of the total amount contributed and the name of the party to which such amount has been contributed.
(4)
If a company makes any contribution in contravention of the provisions of this section, the company shall be punishable with fine which may extend to five times the amount so contributed and every officer of the company who is in default shall be punishable with imprisonment for a term which may extend to six months and with fine which may extend to five times the amount so contributed.
Explanation

For the purposes of this section, “political party” means a political party registered under section 29A of the Representation of the People Act, 1951.

Notes, amendments & references (5)

Provided that the amount referred to in sub-section ( 1 ) or, as the case may be, the aggregate of the amount which may be so contributed by the company in any financial year shall not exceed seven and a half per cent. of its average net profits during the three immediately preceding financial years: Omitted vide the Finance Act, 2017 dated 31.03.2017. To view the Act, Click Here

further Omitted vide the Finance Act, 2017 dated 31.03.2017. To view the Act, Click Here

and the acceptance Omitted vide the Finance Act, 2017 dated 31.03.2017. To view the Act, Click Here

(3) Substituted vide the Finance Act, 2017 dated 31.03.2017. To view the Act, Click Here

disclose Refer circular 19/2013. To view the clarification, Click Here