Electoral Bonds Practice Questions
36 free Electoral Bonds practice questions for the Indian Polity. Tap an option to answer — you get instant feedback, the correct answer, and a detailed explanation for every question.
Electoral Bonds in India were introduced through which Union Budget?
- A Union Budget 2017-18
- B Union Budget 2016-17
- C Union Budget 2018-19
- D Union Budget 2019-20
Correct answer: Union Budget 2017-18
Electoral Bonds were introduced in the Union Budget 2017-18. The scheme was aimed at bringing transparency to political funding through banking channels.
Which institution was authorized to issue Electoral Bonds in India?
- A State Bank of India
- B Reserve Bank of India
- C Election Commission of India
- D Ministry of Finance
Correct answer: State Bank of India
The State Bank of India (SBI) was the only authorized bank to issue Electoral Bonds. This centralized issuance ensured controlled and traceable transactions.
Electoral Bonds are valid for how many days from the date of issue?
- A 7 days
- B 10 days
- C 15 days
- D 30 days
Correct answer: 15 days
Electoral Bonds are valid for 15 days from the date of issue. If not encashed within this period, the amount is deposited in the Prime Minister's Relief Fund.
Who can purchase Electoral Bonds in India?
- A Any Indian citizen or company incorporated in India
- B Only political parties registered with the Election Commission
- C Only government officials
- D Only registered voters
Correct answer: Any Indian citizen or company incorporated in India
Electoral Bonds can be purchased by any Indian citizen or a company incorporated in India. This includes individuals, firms, and corporate entities.
Which of the following denominations are available for Electoral Bonds?
- A Rs. 1000, Rs. 10,000, Rs. 1 lakh, Rs. 10 lakh, Rs. 1 crore
- B Rs. 500, Rs. 1000, Rs. 5000
- C Rs. 200, Rs. 2000, Rs. 20,000, Rs. 2 lakh, Rs. 20 lakh, Rs. 2 crore
- D Rs. 50, Rs. 100, Rs. 500
Correct answer: Rs. 1000, Rs. 10,000, Rs. 1 lakh, Rs. 10 lakh, Rs. 1 crore
Electoral Bonds are issued in fixed denominations such as Rs. 1,000, Rs. 10,000, Rs. 1 lakh, Rs. 10 lakh, and Rs. 1 crore. This allows flexibility for donors of different capacities.
Under the Electoral Bond Scheme, which political parties were eligible to receive funds?
- A All political parties
- B Only parties recognized as national parties by the Election Commission
- C Only ruling parties
- D Parties registered under Section 29A with at least 1% vote share
Correct answer: Parties registered under Section 29A with at least 1% vote share
Only parties registered under Section 29A of the Representation of the People Act, 1951 that had secured at least one per cent of the votes polled in the last general election to the Lok Sabha or a Legislative Assembly could receive electoral bonds. The Supreme Court struck the scheme down as unconstitutional in February 2024, holding that anonymous corporate funding violated the voter's right to information.
Electoral Bonds can be encashed only through which type of account?
- A Savings account
- B Current account
- C Any personal savings or current account of an individual
- D Designated bank account of political party
Correct answer: Designated bank account of political party
Electoral Bonds can only be encashed through the designated bank account of the political party. This ensures proper tracking within the banking system.
Which key feature of Electoral Bonds led to criticism regarding transparency?
- A Limited denominations
- B Short validity period
- C Restricted purchase window for buyers
- D Anonymity of political donors
Correct answer: Anonymity of political donors
Electoral Bonds allowed donors to remain anonymous to the public. This raised concerns about lack of transparency in political funding.
Which act was amended to facilitate the introduction of Electoral Bonds?
- A Only the Income Tax Act
- B Only the Companies Act
- C Only the Representation of the People Act, 1951, but not the tax or corporate laws
- D The Income Tax Act, Companies Act, and Representation of the People Act
Correct answer: The Income Tax Act, Companies Act, and Representation of the People Act
Several laws including the Income Tax Act, Companies Act, and Representation of the People Act were amended. These changes enabled the functioning of the Electoral Bond scheme.
Which body expressed concerns over the Electoral Bond scheme's impact on transparency?
- A NITI Aayog, the government's policy think tank
- B Finance Commission
- C Planning Commission
- D Election Commission of India
Correct answer: Election Commission of India
The Election Commission of India raised concerns that Electoral Bonds could reduce transparency. It warned that anonymous donations might affect electoral fairness.
What was the maximum limit on corporate donations before the Electoral Bond scheme changes?
- A 7.5% of average net profits
- B 5% of profits
- C 10% of the company's total annual turnover
- D No limit
Correct answer: 7.5% of average net profits
Before the amendment, companies could donate up to 7.5% of their average net profits. This cap was removed with the introduction of Electoral Bonds.
Which type of companies can donate through Electoral Bonds after amendments?
- A Any company including loss-making companies
- B Only profitable companies
- C Only government companies
- D Only companies listed on a recognized stock exchange
Correct answer: Any company including loss-making companies
After amendments, even loss-making companies were allowed to donate through Electoral Bonds. This raised concerns about shell companies being used for funding.
During which months are Electoral Bonds typically available for purchase?
- A January, April, July, October
- B February, May, August, November
- C March, June, September, December
- D Only during election months
Correct answer: January, April, July, October
Electoral Bonds are generally available for purchase during specific windows in January, April, July, and October. Additional windows may be provided during general elections.
Which identification is required to purchase Electoral Bonds?
- A No identification needed
- B PAN or KYC compliance
- C Voter ID only
- D Aadhaar only
Correct answer: PAN or KYC compliance
Purchasers must comply with Know Your Customer (KYC) norms, typically requiring PAN details. This ensures traceability through banking channels.
Which Supreme Court action significantly impacted the Electoral Bond scheme in 2024?
- A Upheld the scheme
- B Declared it unconstitutional
- C Referred it to Parliament
- D Postponed judgment indefinitely
Correct answer: Declared it unconstitutional
In 2024, the Supreme Court declared the Electoral Bond scheme unconstitutional. The Court held that it violated the right to information and transparency in political funding.
What was one major concern regarding corporate donations through Electoral Bonds?
- A Excessive small-scale donations
- B Foreign corporate donations allowed
- C Unlimited undisclosed donations
- D High taxation on donors
Correct answer: Unlimited undisclosed donations
The removal of donation caps allowed unlimited corporate donations without disclosure. This raised concerns about undue corporate influence in politics.
Which fund receives money from unencashed Electoral Bonds?
- A Consolidated Fund of India
- B The Contingency Fund of India
- C Prime Minister's Relief Fund
- D The State Disaster Response Fund
Correct answer: Prime Minister's Relief Fund
If Electoral Bonds are not encashed within the validity period, the funds are transferred to the Prime Minister's Relief Fund. This prevents misuse of expired bonds.
Which of the following statements about Electoral Bonds is correct?
- A They are interest-bearing instruments
- B They are bearer instruments
- C They are linked to stock markets
- D They are digital tokens
Correct answer: They are bearer instruments
Electoral Bonds are bearer instruments, meaning ownership is determined by possession. They do not carry the donor's name on the bond.
Which of the following was a stated objective of introducing Electoral Bonds?
- A Increase government tax revenue
- B Reduce black money in elections
- C Promote digital voting systems
- D Encourage higher voter turnout
Correct answer: Reduce black money in elections
The government introduced Electoral Bonds to reduce the use of black money in political funding. The aim was to channel donations through formal banking systems.
Which institution held data on Electoral Bond purchases and encashment?
- A Election Commission
- B Reserve Bank of India
- C The State Bank of India
- D Comptroller and Auditor General
Correct answer: The State Bank of India
The State Bank of India maintained records of Electoral Bond transactions. However, this information was not publicly disclosed, contributing to concerns over transparency.
Electoral Bonds were introduced in India through which Union Budget?
- A 2015-16
- B 2016-17
- C 2017-18
- D 2018-19
Correct answer: 2017-18
Electoral Bonds were introduced in the Union Budget 2017-18. The scheme aimed to reform political funding. It was implemented in 2018.
Which institution was authorized to issue Electoral Bonds?
- A Reserve Bank of India
- B State Bank of India
- C Election Commission
- D Ministry of Finance
Correct answer: State Bank of India
State Bank of India was authorized to issue Electoral Bonds. It acted as the sole issuing authority. This ensured centralized control.
Which political parties are eligible to receive Electoral Bonds?
- A All registered political parties, without exception
- B Only recognized parties with at least 1% votes
- C Only the ruling party in power
- D Only nationally recognized parties
Correct answer: Only recognized parties with at least 1% votes
Only parties securing at least 1% votes in the last election are eligible. This ensures that only significant parties benefit. It avoids misuse.
Electoral Bonds can be encashed only through:
- A Any personal bank account of the recipient
- B Foreign bank accounts held overseas
- C Designated account of political party
- D Direct cash withdrawal at a branch
Correct answer: Designated account of political party
Electoral Bonds can be encashed only through a designated bank account of the political party. This ensures traceability within the banking system. It avoids misuse.
Which type of identity is required to purchase Electoral Bonds?
- A None
- B PAN card
- C Aadhaar only
- D Passport only
Correct answer: PAN card
A valid KYC document such as PAN is required to purchase Electoral Bonds. This ensures compliance with financial regulations. It tracks buyers.
Which of the following denominations is available for Electoral Bonds?
- A ₹500
- B ₹20,000
- C ₹10,000
- D ₹2,000
Correct answer: ₹10,000
Electoral Bonds are available in denominations like ₹1,000, ₹10,000, ₹1 lakh, ₹10 lakh, and ₹1 crore. ₹10,000 is one of them. These cater to different donor capacities.
During which months are Electoral Bonds usually available for purchase?
- A January, April, July, October
- B February, May, August, November
- C March, June, September, December
- D All months
Correct answer: January, April, July, October
Electoral Bonds are available in January, April, July, and October. Additional windows may be opened during elections. This regulates purchase periods.
Which Act was amended to facilitate Electoral Bonds?
- A Income Tax Act
- B Companies Act
- C Representation of People Act
- D All of the above
Correct answer: All of the above
Multiple Acts like the Income Tax Act, Companies Act, and Representation of People Act were amended. This enabled smooth functioning of the scheme. It allowed corporate funding changes.
What was a key objective of introducing Electoral Bonds?
- A Increase tax revenue
- B Promote transparency
- C Reduce elections
- D Control political parties
Correct answer: Promote transparency
The scheme aimed to promote transparency in political funding. Donations were routed through banking channels. This reduced cash-based funding.
Which major concern was raised about Electoral Bonds?
- A High cost
- B Lack of transparency
- C Limited availability
- D Low usage
Correct answer: Lack of transparency
A major criticism was lack of transparency. Donor identities were not disclosed to the public. This raised concerns about hidden funding.
Which institution raised concerns about Electoral Bonds’ transparency?
- A Supreme Court
- B Election Commission of India
- C RBI
- D All of the above
Correct answer: All of the above
The Supreme Court, Election Commission, and RBI all raised concerns. They highlighted risks to transparency. This led to debates on the scheme.
Which key feature of Electoral Bonds led to criticism?
- A Very high denominations
- B Anonymity of donors
- C Limited validity
- D Bank involvement
Correct answer: Anonymity of donors
Anonymity of donors was the most criticized feature. It prevented public scrutiny of political funding. This raised accountability issues.
Which authority holds data on Electoral Bond transactions?
- A Election Commission
- B State Bank of India
- C Supreme Court
- D Finance Ministry
Correct answer: State Bank of India
State Bank of India holds data on purchases and encashment. It maintains records as issuing authority. This ensures centralized tracking.
What was the earlier cap on corporate donations before Electoral Bonds changes?
- A 5% of profits
- B 7.5% of profits
- C 10% of profits
- D No cap on donations
Correct answer: 7.5% of profits
Earlier, companies could donate up to 7.5% of their profits. This cap was removed after amendments. It allowed unlimited corporate donations.
Which Supreme Court action impacted the Electoral Bond scheme in 2024?
- A Upheld the scheme
- B Declared it unconstitutional
- C Modified rules
- D Transferred authority to Parliament
Correct answer: Declared it unconstitutional
In 2024, the Supreme Court declared the Electoral Bond scheme unconstitutional. It cited concerns over transparency. This significantly impacted political funding.
Which of the following best describes Electoral Bonds?
- A Direct anonymous cash donations without banking records
- B Anonymous banking instruments for political funding
- C Tax instruments
- D Government securities
Correct answer: Anonymous banking instruments for political funding
Electoral Bonds are anonymous banking instruments used for political funding. They are issued by SBI. They aim to formalize donations.