Prashant Kishor, long known as one of India’s most influential election strategists, has often been described as the man behind the curtain—advising political parties on how to win, but never himself contesting. That changed with the launch of his Jan Suraaj Party in Bihar. Recently, Kishor made another significant disclosure: between 2021 and 2024, he earned Rs241 crore through consultancy services, paid approximately Rs51 crore in taxes, and then donated nearly Rs99 crore to his own political outfit.
The revelation, made at a press conference in Patna, was in response to questions raised by the BJP regarding the funding of his new party. The figures have attracted attention not only for their scale but for what they reveal about the intersection of tax planning, political donations and the evolving framework of state funding in India.
Numbers behind the Headlines
Between 2021 and 2024, Kishor’s consultancy services generated Rs241 crore in revenue. From this, he paid approximately Rs31 crore in GST and Rs20 crore in income tax. The headline, however, lies in his donation of Rs98.75 crore to Jan Suraaj—by his own admission, all through banking channels and duly receipted.
In effect, Kishor’s personal contribution financed the party’s early activities and, crucially, also reduced his personal tax burden. By donating almost half of his income to a registered political party, he availed himself of the generous deduction available under Indian tax law for political contributions.
Legal Architecture: Section 80GGC and Beyond
Kishor’s actions fall squarely within the provisions of Section 80GGC of the Income Tax Act, 1961, which permits individuals and certain non-corporate entities to claim a 100% deduction on donations made to registered political parties or electoral trusts. The key conditions are simple:
• Donations must be non-cash (i.e., via cheque, demand draft, or electronic transfer).
• The recipient must be a political party registered under Section 29A of the Representation of the People Act, 1951, or an electoral trust approved under the Income Tax Act.
• There is no monetary ceiling on the deduction, except that it cannot exceed the donor’s taxable income.
The new Income Tax Act, 2025, already notified and due to take effect fully from 1 April 2026, carries forward this provision as Section 137, maintaining continuity of treatment. In other words, Kishor’s donation does not rely on an expiring clause or loophole. It is part of a deliberate policy to encourage political funding through transparent, documented contributions.
Self-funding a Political Movement
What distinguishes Kishor’s case from routine donations is the donor-recipient identity. In effect, the strategist has become the benefactor of his own political organisation. Legally, there is no bar on this. The law is indifferent to whether the contribution is made to one’s own party or another. What matters is the mode of payment and the registration status of the party.
This approach contrasts sharply with the methods of most established political outfits, many of whom have relied on opaque funding channels—be it cash donations, shell entities, or, until recently, electoral bonds. With the Supreme Court striking down the electoral bonds scheme earlier this year, many parties face fresh challenges in mobilising resources. Kishor’s model, in this context, appears not only compliant but also forward-looking.
Is This “State Funding” by Another Name?
The effective impact of Kishor’s donation is that his personal tax liability has reduced by an estimated Rs30 - Rs35 crore. That shortfall is borne by the exchequer. Critics may argue this amounts to indirect state funding of his political venture.
This is technically correct—but it is also precisely what the law envisages. Deductions exist to incentivise certain behaviours: saving for retirement, buying insurance, giving to charity, or, in this case, contributing to political parties. The intention is to bring political funding into the white economy. Kishor’s decision simply demonstrates the provision at work.
Contrast with the Old Ways
While Kishor’s disclosures were made openly, other political parties continue to grapple with legacy practices. The Indian National Congress, for instance, was reported to have accepted a relatively small portion of its donations in cash—an act that prompted the income tax authorities to withdraw exemption on its entire income, including amounts received through regular banking channels.
In contrast, Kishor’s approach may mark the beginning of a shift. By showing that large-scale, fully receipted contributions to a registered party are both legal and tax-efficient, he may prompt donors—whether individuals or firms—to channel funds to active political entities rather than obscure, barely functional parties. It is no secret that several such outfits, many registered in Gujarat, have historically served as conduits for questionable donations. Kishor’s model points to a cleaner, if not entirely uncontroversial, alternative.
Political Strategy Meets Financial Strategy
In politics, timing matters as much as compliance. Kishor’s cheques began flowing just as Jan Suraaj transitioned from a padyatra movement into a registered political party on 2 October 2024. Bihar has 243 Assembly constituencies, and contesting across the state requires significant resources. By self-funding the war chest, Kishor not only gained operational independence but also insulated his party from early dependence on outside financiers.
The political message is equally significant: unlike others who rely on industrialists or anonymous donors, Kishor is seen as putting his own resources on the line. It bolsters his image as a leader willing to “invest” in clean politics, even if the financial mechanics tell a more nuanced story.
Implications for Political Funding in India
The Supreme Court’s decision to strike down electoral bonds has reopened the debate on transparency in political finance. One school of thought argues for direct state funding of elections; another insists on robust disclosure of donations. Kishor’s case suggests a third path: individual-led funding with full tax compliance.
If replicated, such a model could shift donor behaviour. Wealthy individuals and professionals might find it preferable to contribute directly to registered parties, especially if the deduction remains intact in the new tax code. For the system as a whole, this could reduce the role of dummy parties and cash-heavy transfers.
Risks & Sustainability
There are, however, caveats. Kishor’s model depends on his exceptional earning capacity as a consultant. Not every political leader has access to similar resources. Over the long term, Jan Suraaj will need broader funding streams to sustain itself. Moreover, large self-donations will inevitably attract scrutiny. The income tax department has already indicated heightened verification of claims under Section 80GGC, particularly for assessment years 2022–25.
There is also an optical risk: while Kishor frames the donations as selfless, critics could characterise them as self-serving. After all, the funds ultimately promote his own electoral prospects. The defence—that the law permits it, and the receipts prove it—remains strong, but perception in politics often counts for as much as compliance.
The Larger Lesson
Whatever one’s view of Kishor’s motives, his disclosures illuminate a broader truth: India’s political finance system is at a crossroads. The era of anonymous, bond-driven funding is over. Cash donations are under sharper scrutiny. In this environment, leaders who can mobilise funds transparently—whether from themselves or others—will enjoy a competitive advantage.
Kishor has demonstrated one way forward: use professional income, route it legally, claim the deduction, and build a party that begins life with a clean balance sheet. It may not satisfy purists who demand state-only funding, nor will it appeal to those accustomed to opaque channels. But it is a template that others may increasingly find worth emulating.
Conclusion
Kishor’s financial disclosures should be read less as a personal boast and more as a case study. They illustrate how the Indian tax code interacts with political funding, and how strategic use of provisions like Section 80GGC (and soon Section 137) can reshape the funding landscape.
It is rare in Indian politics to see funding presented in a manner that is both legally sound and openly acknowledged. Whether Kishor’s model becomes a trend or remains an outlier will depend on whether other leaders can replicate it. But for now, it marks a notable moment: the strategist who once advised others on how to win elections has applied his craft to the financial side of politics—turning consultancy income into campaign capital, and deductions into declarations.
(Karan Bir Singh (KBS) Sidhu is a retired IAS officer and former Special Chief Secretary, Government of Punjab. He holds a Master’s degree in Economics from the University of Manchester, UK. He writes at the intersection of global trade negotiations, Trump-era tariff shocks, and contemporary geopolitics.)
