A lot may have been said about the government's overdrive for ridding the economy of black money and promoting cashless transparent transactions, but most of the income of political parties, particularly BJP and Congress, comes from unknown donors. Though they are significant cash generators in the economy, parties do not provide an account of a certain category of donors. BJP and Congress together account for more than 80% of total funds collected by parties from all sources. BJP's income in 2014-15 was Rs 970 crore and that of Congress Rs 765 crore. In the previous financial year, all national parties together declared a total income of Rs 1,519 crores. BJP again had the highest share of Rs 674 crore while Congress collected Rs 598 crore.

More than 70% of all funds collected by parties are from unknown sources — in income tax parlance this is called black money.

It is not surprising that most of these contributions are in cash. Far from cleaning their own stables, parties are vigorously fighting it out in courts in order to protect receiving contributions from unknown donors and claim tax exemptions as well for such income.

Congress has even moved the Supreme Court recently when a bench of the Delhi high court rejected its plea and taxed it Rs 25 crore for which the party had refused to submit any audited account or declare who had made those contributions. Congress was detected with unaccounted money of Rs 25 crore — an income it had generated in 1994-95.

When it failed to explain the source, the Delhi HC had in a landmark judgment by a two-judge bench in March this year asked the party to pay tax.

The HC bench justified the I-T department's action of withdrawing exemption to Congress in that particular year and, in fact, it directed tax authorities to tax any party which fails to explain the source of its contribution.

Congress had collected close to Rs 1,000 crore during 2004 to 2009, the period of UPA-1. It could only provide proof of income for Rs 85 crore and failed to provide any list of donors for the rest of the money.

The order, while observing that it is necessary to plug the loophole in campaign finance, held that such illegitimate money is vitiating the election process and should be dealt with all seriousness to bring in transparency and accountability.

The HC bench of Justices S Murlidhar and Vibhu Bakhru called the case "symbolic of the general lack of transparency and accountability of political parties in this country" and observed that parties which fail to maintain audited books of accounts of voluntary contributions in excess of Rs 10,000 will be liable to be taxed for such donations deemed as "income from other sources".