182 . Prohibitions and restrictions regarding political contributions.
1. Notwithstanding anything contained in any other provision of this Act, a company, other than a Government company and a company which has been in existence for less than three financial years, may contribute any amount directly or indirectly to any political party:
Provided that: the amount referred to in sub-section (1 ) or, as the case may be, the aggregate of the amount which may be so contributed by the company in any financial year shall not exceed seven and a half per cent. of its average net profits during the three immediately preceding financial years:
Provided further that: no such contribution shall be made by a company unless a resolution authorising the making of such contribution is passed at a meeting of the Board of Directors and such resolution shall, subject to the other provisions of this section, be deemed to be justification in law for the making and the acceptance of the contribution authorised by it.
2. Without prejudice to the generality of the provisions of sub-section (1 ),
a. a donation or subscription or payment caused to be given by a company on its behalf or on its account to a person who, to its knowledge, is carrying on any activity which, at the time at which such donation or subscription or payment was given or made, can reasonably be regarded as likely to affect public support for a political party shall also be deemed to be contribution of the amount of such donation, subscription or payment to such person for a political purpose;
b. the amount of expenditure incurred, directly or indirectly, by a company on an advertisement in any publication, being a publication in the nature of a souvenir, brochure, tract, pamphlet or the like, shall also be deemed,
i. where such publication is by or on behalf of a political party, to be a contribution of such amount to such political party, and
ii. where such publication is not by or on behalf of, but for the advantage of a political party, to be a contribution for a political purpose.
3. Every company shall disclose in its profit and loss account any amount or amounts contributed by it to any political party during the financial year to which that account relates, giving particulars of the total amount contributed and the name of the party to which such amount has been contributed.
4. If a company makes any contribution in contravention of the provisions of this section, the company shall be punishable with fine which may extend to five times the amount so contributed and every officer of the company who is in default shall be punishable with imprisonment for a term which may extend to six months and with fine which may extend to five times the amount so contributed.
Explanation.- —For the purposes of this section, "political party" means a political party registered under section 29A of the Representation of the People Act, 1951.
Legal Commentary & Landmark Judgments: Section 182
Section 182 regulates corporate funding of political parties, prescribing eligibility thresholds, mandatory board approvals, and strict disclosure requirements, fundamentally reaffirmed by the Supreme Court Constitution Bench decision striking down anonymous electoral bonds.
Following the ADR judgment, ensure that all corporate political contributions are capped within historical profit limits and disclosed with full particulars—including recipient political party, mode of payment, and exact amount—in the profit and loss account. In forensic or regulatory investigations, verify that corporate funds were not routed through trade associations, non-profit trusts, or vendor kickbacks to bypass the statutory ban on political donations by newly incorporated companies.