Section 13B excludes from the total income of an electoral trust the voluntary contributions it receives in the previous year. Two conditions apply. First, during the same previous year the trust must distribute to political parties registered under section 29A of the Representation of the People Act, 1951 ninety-five per cent of the aggregate donations received by it in that year, together with any surplus brought forward from earlier years. Second, the trust must function in accordance with the rules made by the Central Government.
The section covers voluntary contributions only. It works together with s. 13A, which excludes the income of the political parties that receive the distributions.
Operative consequences
If the trust distributes less than ninety-five per cent of the year’s donations and brought-forward surplus within the year, the contributions are not excluded.
Breach of the rules governing electoral trusts also takes the contributions outside the section.
Status
The section is operative for AY 2026-27. The Finance Act, 2026 does not amend this section.
The 1961 Act governs AY 2026-27 and earlier assessment years; the Income-tax Act, 2025 governs tax year 2026-27 onwards. For this subject, the 2025 Act provision is s. 12 read with Schedule VIII (Table: Sl. No. 2).
Function in the statutory architecture
Section 13B excludes from the total income of an electoral trust the voluntary contributions it receives in the previous year. Two conditions apply. First, during the same previous year the trust must distribute to political parties registered under section 29A of the Representation of the People Act, 1951 ninety-five per cent of the aggregate donations received by it in that year, together with any surplus brought forward from earlier years. Second, the trust must function in accordance with the rules made by the Central Government.
The section covers voluntary contributions only. It works together with s. 13A, which excludes the income of the political parties that receive the distributions.
Operative consequences
Status
The section is operative for AY 2026-27. The Finance Act, 2026 does not amend this section.
The 1961 Act governs AY 2026-27 and earlier assessment years; the Income-tax Act, 2025 governs tax year 2026-27 onwards. For this subject, the 2025 Act provision is s. 12 read with Schedule VIII (Table: Sl. No. 2).