Patna: The Bihar-Jharkhand headquarters of the income tax department (I-T) has uncovered an alleged large-scale tax evasion and fake political donation racket involving two registered unrecognised political parties (RUPPs) in Bihar under its special investigation ‘Operation Nudge’.According to highly-placed official sources, preliminary findings indicate that more than Rs6,000 crore in suspicious political donations may have been routed through these two entities to facilitate wrongful tax deductions under the Income Tax Act.Searches were conducted at multiple locations across Delhi, Surat, and Ahmedabad recently where the two parties were reportedly operating despite being registered in Bihar. Officials said the parties were identified after an extensive financial analysis covering all 145 RUPP registered in Bihar.The investigation found that the parties misused section 80GGC of the Income Tax Act which allows individual taxpayers to claim a 100% tax rebate on monetary contributions made to registered political parties. The provision was introduced to encourage transparent and legitimate political funding, but investigators claim it was misused to generate fraudulent tax benefits.According to officials, the investigation began nearly 18 months ago after the department observed an unusually wide gap between gross tax collection and net tax collections, resulting in disproportionately high tax refunds. A detailed analysis of the data later helped investigators identify the two political parties.The I-T department alleged that donors made contributions through banking channels, primarily by cheques or online. The funds were then transferred from the political party’s bank accounts to multiple service providers under the guise of legitimate expenditure. Investigators believe many of these accounts were fictitious or created solely to facilitate layered financial transactions.The money was allegedly routed through several intermediary accounts before being returned to the original donors in many cases through hawala channels. Officials explained that if a donor contributed Rs10 lakh, nearly Rs 9lakh was allegedly returned, while the political party retained around Rs1 lakh as commission. Meanwhile, the donor claimed a tax deduction on the full amount, causing a significant loss to the exchequer.The department has identified more than 50,000 donors, including several chartered accountants, traders and other professionals of Delhi and Gujarat. While some individuals have reportedly admitted their involvement during questioning, others are said to be absconding. Officials emphasised that the final assessment is still underway, and the exact financial implications will be determined upon completion of the investigation.
