What are Electoral bonds?

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About Electoral bonds-

• In India, Electoral bonds(EB) are instruments or securities that can be used to donate funds to political parties.
• They have been proposed as a way of reforming election funding in the Union Budget 2017. 
• EB were introduced to ensure that all the donations made to a party would be accounted for in the balance sheets without exposing the donor details to the public.
• They are interest-free bearer instruments used to donate money anonymously to political parties. 
• A bearer instrument (in the nature of a promissory note) does not carry any information about the buyer or payee and the holder of the instrument (which is the political party) is presumed to be its owner.
• A citizen of India or a body incorporated in India are eligible to purchase the bond.
• These bonds can be purchased for any value in multiples of ₹1,000, ₹10,000, ₹10 lakh, and ₹1 crore from any of the specified branches of the State Bank of India.
• There is no limit on the number of bonds an individual or company can purchase. 
• The purchaser will be allowed to buy electoral bonds only on due fulfillment of all the extant KYC norms and by making payment from a bank account
• The electoral bonds are available for purchase for 10 days at the beginning of every quarter. 
• The first 10 days of January, April, July and October have been specified by the government for purchase of electoral bonds. 
• An additional period of 30 days shall be specified by the government in the year of Lok Sabha elections.
• The bonds will have a life of 15 days (15 days time has been prescribed for the bonds to ensure that they do not become a parallel currency).
• They can be used to make donations to registered political parties that have secured not less than 1% of the votes polled in the last election to the Lok Sabha or Assembly.
• The bond shall be encashed by an eligible political party only through a designated bank account with the authorized bank.
• A donor will get a deduction and the recipient, or the political party, will get tax exemption, provided returns are filed by the political party.

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