It is a non-interest bearing financial instrument which can be used by people/company incorporated in India for funding eligible political parties.
The government had notified the Electoral Bond Scheme in 2018 to ensure transparency in political parties.
The Security Printing & Minting Corporation of India (SPMCIL), has been authorised to print the electoral bonds.
The range of a bond is between Rs 1,000 to Rs 1 crore.
(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.
An individual citizen
A Hindu undivided family
An association of persons or a body of individuals, whether incorporated or not
Other persons or agencies
(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.
The electoral accounts are issued by the State Bank of India (SBI).
The bonds can be purchased for a period of 10 days each in the months of January, April, July and October every year. These 10 days will be specified by the government.
The government can also specify an additional 30 days for the purchase of the bond in the year of the general election to the Lok Sabha.
Political parties are allotted a verified account by the Election Commission and all the electoral bond transactions are done through this account only.
The donors can buy electoral bonds and transfer them into the accounts of the political parties as a donation.
A donor will get a tax deduction and the recipient, or the political party, will get tax exemption, provided returns are filed by the political party.
The name of the donor is kept confidential.
The bonds remain valid for 15 days.
They can be encashed by an eligible political party only through a bank account with the authorised bank within that period only.
The amount of bonds not encashed within the 15-day validity period will be deposited by the authorised bank (SBI) to the Prime Minister Relief Fund.