Section 182: Prohibitions and restrictions regarding political contributions
This section regulates and restricts companies from making political contributions, requiring them to follow certain procedures and disclose their contributions, with penalties for non-compliance.
Penalty
(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.
The section, clause by clause
What the section says
In plain terms
(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 years, may contribute any amount directly or indirectly to any political party: *
A company, other than a Government company and a company which has been in existence for less than three financial years, may contribute any amount directly or indirectly to any political party, but only if a resolution authorising the contribution is passed at a meeting of the Board of Directors.
(1)1* Provided 2*** 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 3*** of the contribution authorised by it.
(2)Without prejudice to the generality of the provisions of sub-section (1),— *
A company's donation or subscription to a person or activity that can be seen as supporting a political party will also be considered a political contribution, and the cost of advertisements in publications that support a political party will be deemed a contribution to that party.
(2)(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 apolitical party shall also be deemed to be contribution of the amount of such donation, subscription or payment to such person for a political purpose;
(2)(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,—
(2)(b)(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
(2)(b)(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:
Contributions to political parties must be made by account payee cheque, account payee bank draft, electronic clearing system, or through a notified scheme, and not by any other instrument.
provisoProvided 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.]
(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.
If a company makes a contribution in contravention of this section, it will be punishable with a fine of up to five times the amount contributed, and every defaulting officer will be punishable with imprisonment of up to six months and a fine of up to five times the amount contributed.
explanationExplanation.—For the purposes of this section, “political party” means a political party registered under section 29A of the Representation of the People Act, 1951 (43 of 1951).
The right-hand column is written from the section text, not quoted from it, and it has no legal force. Where the two differ, the left-hand column is the law.
Amendment notes
- 1. The proviso omitted by Act 7 of 2017, s. 154 (w.e.f. 31-3-2017).
- 2. The word “further” omitted by Act 7 of 2017, s. 154 (w.e.f. 31-3-2017).
- 3. The words “and the acceptance” omitted by s. 154, ibid. (w.e.f. 31-3-2017).
- 4. Subs. by s. 154, ibid. for sub-section (3) (w.e.f. 31-3-2017).
Referred to by
Search the whole Act, or ask it a question, in the interactive browser.
Reproduced from the official India Code print for reference. Check the current text on India Code before you rely on it, and read the section alongside its Rules. Nothing here is legal advice.