• The Supreme Court refused any interim stay on the electoral bond scheme and directed all political parties to furnish receipts of electoral bonds to the Election Commission.
• All parties must submit details of the identity of donors, amount in account of donors by May 30 in sealed cover.

What is the 'electoral bond'?

• The Finance Bill, 2017, introduced "electoral bonds", that are interest free bearer bonds. It is an instrument that is used to donate money to political parties. The parties involved will probably be a donor, the political party and the RBI -- which acts as the intermediary.

Is it the first of its kind in the world?

• It may be. None of the electoral finance experts that News18 spoke to could recall of a similar approach to party funding practiced in any other democracy around the world. Jagdeep Chhokar of the Association of Democratic Reforms, said that while there have been electoral trusts in India, the concept of electoral bonds is new.

How was it introduced?

• Electoral bonds were introduced by amendments made through the Finance Act 2017 to the Reserve Bank of India Act 1934, Representation of Peoples Act 1951, Income Tax Act 1961 and Companies Act. On January 2, 2018, the Centre notified the scheme for electoral bonds, which are designed to be a bearer instrument like a Promissory Note. These bonds can be purchased by an Indian citizen or a body incorporated in India.
• Electoral bonds can be purchased from an authorized bank, issued to a political party and can be cashed in via the party’s verified account within 15 days. The identity of the donor will be known only to the bank and otherwise be kept anonymous.

Are Electoral Bonds tax deductible?

• Donations will be tax deductible, and the benefitting political party will get a tax exemption for the amount received. Further, the RPA Act has been amended in March last year, to exempt parties to inform the Election Commission (EC) of any amount received above Rs 2,000, if made through electoral bonds.

How would transparency be maintained according to the Centre?

• The Centre says that bonds can be purchased only from the State Bank of India. They can be bought by a donor with a KYC-compliant account.
• The bonds will be available for purchase only for a period of 10 days in the beginning of each quarter, in the months of January, April, July and October. They can be bought for any value, in multiples of Rs 1,000, Rs 10,000, Rs 1 lakh, Rs 10 lakh or Rs 1 crore. The name of the donor will not be mentioned in the bond.
• The face value of the bonds shall be counted 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.
• Centre has also harped on the point that political party will have to file returns before the EC as to how much money has come through electoral bonds, which will provide accountability.