A registered trade union is entitled to maintain two kinds of funds. They are: General Fund and Political Fund. The Trade Unions Act, 1926 imposes certain
conditions on the Trade Unions to spend/utilize the funds only for some specific
purposes as stated under Section 15 (General Fund) and Section 16 (Political
Fund) of the act.
Amendment regarding Political fund
- In 1946, based on the ideology that development of a group need
involvement or support of political party directly or indirectly, concept of
trade election and collection of political fund started.
- Aim for use of this fund for political agenda like election expenses,
campaigning and strengthen TU
- Political fund deposition was made compulsory for all TU members to get
Procedure for contribution in political fund- Notice Check-in Check-out process::
- Under section 16(1) trade union for the purpose of spending on political
cause must create a separate political fund. Contributions to such political
funds should be collected separately.
- In Trade Union Amendment 2019, deposition of political fund was made
voluntary under section 16 clause 3.
- Reason- To release pressure in labors politic. Moreover, politics is a
matter of interest and it need not be compelled to all labors for participation.
- According to 16(3):
Contribution to the political fund cannot be compelled or made as compulsory
or condition to admit a person as member of the trade union. a member who
does not contribute to the said fund shall not be excluded from any benefits
of the Trade Union. However, the control and management of the political
fund can be vested exclusively to those members who contributed to the
Purpose of political fund
TU issue/publish application or notice for call for deposition of
- Check in:
Interested Trade union members having capacity to pay, fill check-in form
and monthly amount on the name of political fund will be deducted from their
- Filled Check in form remains valid for 6 months, after which members
need to fill new check-in form and enroll again for political fund.
- Check-out application:
After lapse of check-in form, those members who wish to discoutinue this deposition may fill check-out applications.
- Time span for check-in form is only 6 months, the reason being financial
situation of labor may change and may want to opt out of such deposition
Section 16(2) of TUA ,1926 specifically states the purposes for which the
political fund may be utilized with an aim to promote civic and political
interests of its members. These are:
- The payment of any expenses incurred, either directly or indirectly, by
a candidate or prospective candidate for election as a member of any
legislative body or of any local authority, before, during, or after the
election in connection with his candidature or election;
- Maintenance of any person who is a member of any legislative body or
- Registration of electors or the selection of a candidate for any
legislative body or local authority;
- Conducting of political meetings or distribution of political literature
and documents to the members of the trade union or to the general public.
It is important to note that the audit of this political funds shall be carried
out along with the audit of the general account of the Trade Union and by the
same auditor or auditors.
Political fund though not compulsory, but considered important for TU having
political interests. Section 16(1) and (2) under TUA, 1926 explains about usage
of political funds 16 clause 3 emphasize on voluntary creation of political fund
without any loss of benefits under the act.
- Trade union act 1926
- The Trade Unions (Amendment) Bill, 2019