Section 12
Section 12: incomes not included in total income of political parties and electoral trusts
Section 12 is a companion provision to Section 11, dealing specifically with political parties and electoral trusts. It excludes certain income of these entities from total income, with the actual list of exempt income and the conditions attached to it set out in Schedule VIII.
This explanation is AI-assisted and pending review by our CA/CS team. It is general information, not professional advice - always cross-check against the bare law text above or talk to our tax team for guidance specific to your situation.
What Section 12 says
Section 12(1): in computing the total income of a political party or an electoral trust for a tax year, any income listed in Schedule VIII is not included, subject to the conditions specified in that Schedule.
Section 12(2): if the conditions in Schedule VIII are not satisfied in a tax year for a particular income item, that income becomes chargeable to tax under this Act for that tax year.
Section 12(3): the Central Government may make rules or issue notifications for the purposes of this section, as specified in Schedule VIII.
What this means in practice
As with Section 11's exemptions, the operative detail - which categories of income qualify, and what conditions a political party or electoral trust must meet (such as record-keeping or reporting requirements) - lives in Schedule VIII rather than in the section text itself.
Failing to meet a Schedule VIII condition in a given tax year results in the relevant income becoming taxable for that year, rather than a permanent loss of exempt status.
Frequently asked questions
Does Section 12 exempt all income of a political party or electoral trust?
No - only the income items listed in Schedule VIII, and only if the conditions specified in that Schedule are satisfied for the relevant tax year.
What happens if a political party fails to meet the Schedule VIII conditions?
The income concerned becomes chargeable to tax under the Act for that tax year, as per Section 12(2).
Related sections
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Talk to our tax team about this sectionLast updated 9 September 2026