The government plans to set a threshold criteria for political parties enjoying tax exemptions in order to check money laundering by outfits which do not contest elections, Finance Minister Arun Jaitley said on Tuesday.

Revenue Secretary Hasmukh Adhia has been asked to look into the issue, he said. Jaitley’s remark assumes significance in the context of the Election Commission’s recommendations to the government to amend laws to bar tax exemption to parties which do not contest elections and win seats in Lok Sabha and Assembly polls and to ban anonymous donations above Rs 2,000 to political parties.

Jaitley underlined the need for making political funding as transparent as possible, saying donations must be smaller in size but huge in number.

“Political funding is necessary, it should be smaller in terms of denomination but larger in its spread,” he said.