Gujarat’s Economic Offences Wing is probing a widespread scheme involving unrecognised political parties reportedly channeling over Rs 2,284 crore in fake donations, leading to a Rs 684 crore tax loss, in a scheme that exploited political donation rules and shell entities.
Gujarat’s Economic Offences Wing has opened a sweeping investigation into an alleged political donation racket that investigators say used registered unrecognised political parties to generate bogus tax deductions and move large sums of money back to donors in cash. According to complaints from the Income Tax Department, the network involved four parties and is alleged to have channelled more than Rs 2,284 crore in fake donations, with the tax loss estimated at roughly Rs 684 crore rather than a rounded figure of Rs 700 crore. The parties named in the complaints are Bharatiya National Janata Dal, Swatantrata Abhivyakti Party, Garib Kalyan Party and Satyavadi Rakshak Party, and the allegations have not been proved in court.
Investigators say the arrangement followed a familiar pattern. Taxpayers allegedly sent money to party accounts through banking channels such as RTGS and cheques, then received donation receipts that could be used to claim income tax benefits available for eligible political contributions. The funds were then allegedly pushed through intermediary or shell entities, sometimes dressed up with purchase bills or other paperwork, before being withdrawn and returned to the original donors in cash after commissions were deducted. Reports by Desh Gujarat, Rediff and The Times of India say the alleged commission ranged from about 2% to 10%, depending on the case.
The largest of the four cases concerns Bharatiya National Janata Dal, which the Income Tax Department says received more than Rs 1,143.85 crore from 56,238 donors between FY2020 and FY2025, with an estimated tax loss of about Rs 343 crore. The complaint, as described by India TV News, names party president Surendrakumar Vitthalbhai Gajera, general secretary Vipul Solanki, treasurer Ronaksinh Chavda and chartered accountant Adil Sayed among the accused, and alleges the money was routed through entities including JE Trading, Kajal Enterprises and Parmar Associates. Those allegations are part of the FIR and remain subject to investigation.
The other three cases centre on Swatantrata Abhivyakti Party, Garib Kalyan Party and Satyavadi Rakshak Party. Media reports say the two newest complaints against SAP and GKP involve alleged donations of Rs 519 crore and Rs 206.8 crore respectively, while the Satyavadi Rakshak Party case is said to involve about Rs 415 crore in suspicious contributions. The Times of India reported that investigators believe chartered accountants and other facilitators helped prepare and upload documents, while some complaints also allege that false contribution reports were filed with the Election Commission. Gujarat CID-Crime has said it is continuing to trace the money trail and is expected to seek accounting expertise as it examines banking records, paperwork and the roles of party office-bearers, intermediaries and advisers.
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