India’s Constitution mentions political parties only in the Tenth Schedule. Under the Representation of the People Act, registered unrecognised parties can still receive contributions, while their tax treatment falls under the Income-tax Act. The Election Commission can delist parties from its records, but delisting is not the same as deregistration.
The Association for Democratic Reforms reported a 223% rise in declared income among registered unrecognised parties in 2022–23. Of 2,764 such parties, 739 had filed financial records with the Election Commission for that year. In August 2025, the commission said it had delisted 334 parties as part of a continuing effort to clean up the electoral system.
Figures cited in research on party finances show the scale of the money involved. Twenty-two parties had ₹18,742.31 crore available around the 2024 general election, including ₹7,416.31 crore raised between the announcement and the end of the vote. They reported ₹14,848.46 crore remaining after ₹3,861.57 crore in election spending. A separate estimate put the revenue forgone through tax exemptions for political donations at ₹11,813 crore over a decade.
The same research found that declared donations rose from ₹714 crore in 2015–16 to ₹7,203 crore in 2023–24, while only 41.76% of ₹28,287 crore in donations over nine years was claimed as tax-exempt. The figures do not by themselves establish wrongdoing, but the gaps in filing and disclosure make it difficult to trace who funds parties and on what terms. Proposals in the debate include standardised digital disclosures, independent audits and clearer consequences for parties that do not contest elections.