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    Question

    A political party receives large cash donations from

    various individuals without bank transfers. An investigation suggests the donations may be proceeds of crime from electoral offence violations. Under PMLA, which statements are correct? Statement 1: Political parties cannot be investigated under PMLA. Statement 2: If donations are proceeds of electoral violations (scheduled offences), they become liable for attachment. Statement 3: The political party must prove the donations were from legitimate sources. Statement 4: Proceeds of crime received for political purposes are exempt from PMLA. Which statements are correct?
    A Statements 1 and 4 only Correct Answer Incorrect Answer
    B Statements 2 and 3 only Correct Answer Incorrect Answer
    C Statements 1 and 2 only Correct Answer Incorrect Answer
    D Statements 2 and 4 only Correct Answer Incorrect Answer
    E All statements are correct Correct Answer Incorrect Answer

    Solution

    Entities, including political organizations, are subject to PMLA if proceeds are involved—Statement 1 is incorrect. Electoral violations can be scheduled offences; such proceeds are liable—Statement 2 is correct. Section 24 reverses burden on recipient—Statement 3 is correct. No exemptions exist—Statement 4 is incorrect. Statements 2 and 3 are correct.

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