Electoral Bonds FAQs: All You Need to Know!

Sakshi Education

1. What constitutes an Electoral Bond?
An Electoral Bond stands as a bearer Banking Instrument devised for the financial backing of qualifying Political Parties. A qualifying Political Party is one duly registered under Section 29A of the Representation of the People Act, 1951 (43 of 1951), having secured at least one percent of the votes polled in the preceding General Election to either the House of the People or the Legislative Assembly.

2. What is the duration of validity for Electoral Bonds?
Electoral Bonds remain valid for a period of Fifteen Days from the Date of Issue. For instance, an Electoral Bond issued on 1st March 2018 remains valid until 15th March 2018.

3. Can Electoral Bonds be redeemed in any account?
No, Electoral Bonds can only be redeemed by a qualifying Political Party by depositing them into their Designated Bank Account held with an Authorized Bank.

4. Who is eligible to purchase Electoral Bonds and donate through them?
Electoral Bonds under this Scheme may be purchased by individuals who are citizens of India or entities incorporated or established in India. The term "Person" encompasses various entities including individuals, Hindu Undivided Families, companies, firms, and associations of persons.

5. At what price are Electoral Bonds sold, and what denominations are available?
Electoral Bonds are issued in denominations of Rs 1000, Rs 10,000, Rs 1,00,000, Rs 10,00,000, and Rs 1,00,00,000.

6. What are the Know-Your-Customer (KYC) norms for purchasing Electoral Bonds?
The existing instructions laid down by the Reserve Bank of India concerning Know Your Customer norms of a bank's customer shall be applicable to all applicants of Electoral Bonds.

7. What documents are required for purchasing Electoral Bonds?
In addition to the Application Form and Pay-in-Slip, the applicant must submit copies of Citizenship Proof and KYC documents, along with the originals.

8. Can an individual purchase Electoral Bonds multiple times?
Yes, each application will be treated as a fresh request for the purchase of Electoral Bonds, necessitating fresh KYC documents each time.

9. Is online application possible, and what are the payment options for purchasing Electoral Bonds?
Yes, payment for Electoral Bonds can be made via Cheque, DD, NEFT/RTGS, or Direct Debit to the applicant's account. However, the applicant and remitter must be the same entity.

10. Can Electoral Bonds be purchased using foreign currency?
No, payment for the issuance of Electoral Bonds is accepted only in Indian Rupees.

11. Who is eligible to open a Current Account for Redeeming Electoral Bonds?
Only Political Parties registered under Section 29A of the Representation of the People Act, 1951 (43 of 1951), and having secured not less than one percent of the votes polled in the last General Election to either the House of the People or the Legislative Assembly are eligible.

12. Can a Political Party open a Current Account with any Bank for redeeming Electoral Bonds?
No, the Current Account can only be opened in the currently designated four Authorized SBI Branches. Existing Current Accounts of Political Parties at these Authorized SBI Branches can also be utilized, provided they are amended with a new product code.

13. Can Political Parties withdraw Cash from the Bank upon redeeming Electoral Bonds?
No, Cash Payment cannot be provided against Electoral Bonds under any circumstances.

14. What happens if a Political Party fails to secure less than one percent of the votes polled in the subsequent Election after opening a Current Account?
If a Political Party becomes de-notified before the next issuance of Electoral Bonds, the Bank will modify the product code of their account to a regular Current Account code, rendering it ineligible for receiving Electoral Bond deposits.

15. Can a Political Party utilize this Current Account for other banking transactions?
Yes, the Political Party is allowed to utilize this Current Account for other banking operations.

16. Can Electoral Bonds be cashed in the Current Account after their validity period?
No, Electoral Bonds cannot be cashed in the Current Account after the expiry of their fifteen-day validity period from the date of purchase.

17. What is the rate of interest payable on Electoral Bonds?
No interest is payable on Electoral Bonds under this Scheme.

18. Can a Political Party close this Current Account after the election?
Yes, the account can be maintained for regular banking operations, and if required, the Political Party can choose to close the account at any given time.

19. If a Political Party doesn't have an Account at Designated SBI Branches, can they still cash Electoral Bonds in another Account?
No, Electoral Bonds can only be cashed by a qualifying Political Party through a bank account maintained with Designated SBI Branches.

20. Can the existing Account of Political Parties be used for depositing the proceeds of Electoral Bonds?
Yes, the existing account can also be designated by the Political Party. However, only one account of the eligible Political Party can be designated for receiving funds from Electoral Bonds.

21. Who has the authority to cash Electoral Bonds?
Only the eligible Political Party, meeting the criteria outlined in Gazette Notification No. 20 dated 02.01.2018, can cash Electoral Bonds.

22. How are the funds from Electoral Bonds transferred to Political Parties?
Political Parties need to complete the Redemption Slip and deposit it, along with Electoral Bonds, for redemption only at the currently designated four Authorized SBI Branches within the stipulated period of fifteen days from the date of issuance of the Electoral Bond.

23. What is an Electoral Bond Redemption Slip?
The Redemption Slip is a mandatory document that must be filled out and attached with Electoral Bonds during redemption by Political Parties, and it will be available at all currently designated four Authorized SBI Branches.

24. Does a Political Party receive any Tax Benefit?
No, the face value of the Electoral Bond is considered as income by way of voluntary contributions received by an eligible Political Party, for the purpose of exemption from Income-Tax under Section 13A of the Income Tax Act, 1961.

25. Can the Political Party receive Cash from the Bank in exchange for Electoral Bonds?
No, Cash Payment is not permitted for Electoral Bonds under any circumstances.

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