Any association or body of individual citizens of India calling itself a political party should make an application to the Election Commission for its registration as a political party.

Every such application, duly signed by the Chief Executive Officer of the association or body (Secretary or any other designation) must be presented to the Secretary of the Election Commission.

It must contain the following particulars, namely:

1. the name of the association or body;
2. the State in which its head office is situated;
3. the address to which letters and other communications meant for it should be sent;
4. the names of its president, secretary, treasurer and other office-bearers;
5. the numerical strength of its members, and if there are categories of its members, the numerical strength in each category;
6. whether it has any local units; if so, at what levels;
7. whether it is represented by any member or members in either House of Parliament or of any State Legislature; if so, the number of such member or members.

The application must be accompanied by a copy of the memorandum or rules and regulations of the association or body and such memorandum or rules and regulations must contain a specific provision that the association or body shall bear true faith and allegiance to the Constitution of India as by law established, and to the principles of socialism, secularism and democracy, and would uphold the sovereignty, unity and integrity of India.

After considering all the particulars as aforesaid in its possession and any other necessary and relevant factors and after giving the representatives of the association or body reasonable opportunity of being heard, the Commission decides either to register the association or body as a political party, or not so to register it; and the Commission communicates its decision to the association or body. The decision of the Commission is final.

Every political party may accept any amount of contribution voluntarily offered to it by any person or company other than a Government company, but no political party can accept any contribution from any foreign source.

The treasurer or any other person authorized by the political party must prepare a report in each financial year listing the contribution in excess of twenty thousand rupees received by such political party from any person or company (Other than Government) in that financial year.

This report must be submitted to the Election Commission before the due date for furnishing a return of its income of that financial year. If the political party fails to submit a report then it shall not be entitled to any tax relief.

A recognized political party shall either be a National party or a State party. A political party shall be treated as a recognized National party, if, and only if:

1. If it secures six per cent of valid votes polled in any four or more states at a general election to the Lok Sabha or to the legislative assembly; and, in addition, it wins four seats in the Lok Sabha from any state or states; or
2. If it wins two per cent of seats in the Lok Sabha at a general election; and these candidates are elected from three states; or
3. If it is recognised as a state party in four states.

At present there are 6 national parties in the country namely BJP, BSP, CPI, CPM, INC and NCP. A political party, other than a National party, shall be treated as a recognized State party in a State or States, if, and only if:

1. If it secures six per cent of the valid votes polled in the state at a general election to the legislative assembly of the state concerned; and, in addition, it wins 2 seats in the state assembly; or
2. If it secures six per cent of the valid votes polled in the state at a general election to the Lok Sabha from the state concerned; and, in addition, it wins 1 seat in the Lok Sabha from the state concerned; or
3. If it wins three per cent of seats in the legislative assembly at a general election to the legislative assembly of the state concerned or 3 seats in the assembly, whichever is more; or
4. If it wins 1 seat in the Lok Sabha for every 25 seats or any fraction thereof allotted to the state at a general election to the Lok Sabha from the state concerned; or
5. If it secures eight per cent of the total valid votes polled in the state at a General Election to the Lok Sabha from the state or to the legislative assembly of the state. This condition was added in 2011.

The status of national or state party is contingent on the performance of a political party’s performance the respective elections. Thus the number of National or State parties vary depending on the assembly or General elections.

The candidates of recognized parties are entitled for free supply of certain materials like such number of copies of electoral rolls, as finally published under the Representation of the People Act, 1950 and such other material as may be prescribed.

The Central Government in consultation with the Election Commission can decide items to be supplied to the recognized political parties.

Other exclusive benefits enjoyed by recognized parties are

1. Free airtime on Doordarshan and All in Radio for election campaign.
2. A recognized party needs not to have to get his nomination paper subscribed by at least 10 voters in his constituency.
3. The name of the candidates nominated by the recognized party are organized in alphabetical order and printed on the top of Ballot paper followed by candidates nominated by registered party and independent candidates.
4. If a candidate nominated by a recognized party passes away before the commencement of the polling then the election shall be adjourned and the political party concerned will be given one week time to re-nominate a candidate and there after the election process will be completed.
5. Recognized political parties are entitled to the allotment of symbols given for its exclusive use.
6. The proposed amendments to the Representation of People act, 1951 for the introduction of state funding of election provides for extending financial assistance only to the recognized party.