The Supreme Court admitted a Public Interest Petition challenging the Income Tax Act provision that permits political parties to receive tax-exempt, anonymous cash donations below Rs. 2,000.​

A Bench of Justices Vikram Nath and Sandeep Mehta heard brief submissions from Senior Advocate Vijay Hansaria, appearing for petitioner Khem Singh Bhati, who argued that Section 13A(d) of the Income Tax Act, 1961 enables political parties to legally shield the identity of donors making small cash contributions, thereby undermining transparency in political funding.​

At the outset, the Bench queried why the petitioner had not approached a High Court, but ultimately noted that the challenge raised issues of nationwide importance affecting all recognised political parties.

The petitioner claimed that the core issue is whether, in an era of widespread digital payments and UPI-based transactions, there remains any legitimate justification for exempting cash donations under Rs. 2,000 from disclosure and tax scrutiny.​

The petition relies on Article 19(1)(a), contending that voters’ right to information about political funding cannot be meaningfully realised if parties are allowed to receive untraceable cash in unlimited aggregate sums by breaking donations into smaller units. It urges the Court to read down or strike Section 13A(d) and mandate that all political contributions be routed through traceable banking or digital channels with full donor particulars.​

The Bench issued notice to the Union of India, the Election Commission of India, the Central Board of Direct Taxes, and others, calling for their responses. The matter was listed for further hearing after four weeks.