Tax Dispute Becomes Political as India Freezes Opposition’s Accounts

India’s largest opposition party accused the national authorities on Thursday of paralyzing its political activities by blocking the party’s access to its bank accounts, in what it described as a heavy-handed response to a tax dispute just weeks before a pivotal general election.

Officials with the party, the Indian National Congress, said that eight of its 11 main accounts at four banks had been frozen, and that there was no clear indication of when the party would regain access to the money.

“We can’t support our workers; we can’t support our candidates,” Rahul Gandhi, an Indian National Congress leader, said at a news conference in New Delhi. “Our leaders can’t fly. Forget flying — they can’t take a train.”

“Our ability to fight elections has been damaged,” he said.

Campaigning is heating up for a six-week-long election that starts on April 19 and will determine the next prime minister for the world’s most populous democracy. To run election campaigns from the Himalayan mountains to India’s southern shores, political groups spend billions of dollars in what is seen as one of the world’s most expensive elections.

Under Indian law, political groups are exempted from paying income taxes on their funding from individuals and corporations, but must declare their income to the tax authorities each year. The current dispute relates to how heavily the Indian National Congress should be penalized for past irregularities.

Last month, the country’s Income Tax Department, which is controlled by Prime Minister Narendra Modi’s government, froze the Congress party’s accounts on accusations that it had been 45 days late in filing tax returns on its cash contributions for the 2017-18 financial year. The department also took from the party’s bank accounts $2 million of the $16 million that it said was owed in penalties.

Back to top button