Paying taxes is an obligation towards the state. Do elected ministers pay taxes? This article initially highlights the necessity to pay taxes. Then it discusses certain states where the politicians pay taxes or state government does on their behalf. It also puts the author’s view that ministers should not be fully exempted from the tax paying as it is an unjust to other citizens. Being the citizens, it is their obligation too and they should also act their part of tax paying. A petition should be filed for this unjust as many of them do not even deserve to be ministers or holding that position so that this issue also gets addressed.
Taxes are the responsibility of the citizens of the country to pay them. Taxes are levied on governments for their citizens to finance their activities to boost the country’s economy and improve the quality of life of its citizens. The government’s tax mandate in India is derived from the Indian Constitution, which provides for the levying of taxes by the Central Government and the State. All taxes levied within India need to be funded by a corresponding law passed by Parliament or the State Legislature.
In general, we can say that tax money is used to pay for recurring and non-recurring expenses in the country. Recurring expenses can be the same as salaries paid to public servants etc. Non- recurring expenses are used to build long-term national assets (for example: airports, trains, roads, bridges, schools, colleges, factories etc.). The growing economy focuses on recurring costs (also called capital expenditures – CAPEX).
Do Elected Ministers Pay Taxes?
Politicians have admirable salaries with additional benefits such as free air travel, train travel, water, electricity, furniture, telephone, rental housing, office expenses, etc. While the average person must cover all these expenses on his or her salary after paying all taxes. This is not justified by human reasons.
Politicians are using their posts as they decide to increase their salaries on their own with big money.
Elected Ministers enjoy all tax benefits and exemptions. Members of Parliament and Members of Parliament do not pay taxes on their salaries. We only must pay taxes. They are responsible for paying taxes if they receive another income, but they have their own ways of showing up in someone else’s account and avoiding taxation.
Many companies in our country are managed by the ministers but no one knows this. The announcement of their property during the election remains small and people know the truth.
Let us look at a few states-
The government of Uttar Pradesh has been paying an income tax bill for all ministers, deputy and chief minister and state minister.
Section 3 (3) of the Uttar Pradesh Department of Teachers (Wages, Grants and Various Conditions), 1981 Act states that any income tax payable on the salaries of ministers, deputy ministers and ministers of the UP government, “shall be borne by the State Government.”
But now this section is scrapped off and now the UP-Chief Minister and other ministers must pay their own taxes.
Since Uttar Pradesh had this law since 1981, it only made sense that it also applied to Uttarakhand, which was recorded at UP.
In 2010, Uttarakhand rejected the UP Act’s application to the state and passed a law that stipulated that taxes paid on the salaries of chief ministers, ministers, ministers of state, and deputy ministers would be borne by the national government.
The East Punjab State (as it was then) enacted the East Punjab Ministers Salaries Act, 1947. The Punjab state passed another law to pay the salaries of deputy ministers in 1956, which was also extended to pay the secretary general of parliament and parliament Secretary.
In 1976, five years before VP Singh enacted the UPP law, new clauses were enacted in both Punjab’s laws, which stated that taxes on the salaries of ministers, deputy ministers, the chief parliamentary secretary and the secretary of parliament would be paid. The leader of the opposition party was also given the same benefit.
On March 19, 2018, the Punjab cabinet decided to scrap these provisions. However, the amendments do not appear to have been given the functionality in the manual. On August 6, 2019, the Punjab Legislature passed new bills that stipulated that property taxes on the buildings and houses of these officials would continue to be paid by the government (see the report in The Tribune).
Even before the Punjab, the state of Haryana had enacted the Haryana Salaries and Allowances of Ministers Act, 1970, Section 6 of which stipulated that taxes levied on the salaries and the allowances of its ministers would be borne by the State Government.
This tax exemption for ministers applies to any benefits received by them as a member of the Haryana’s Legislative Assembly.
Jammu and Kashmir
Jammu and Kashmir passed a law in 1956 affecting the salaries and allowances of their ministers and ministers, and another law in 1957 for their deputies.
In 1981, Section 3 of both of these laws was amended to mean that any income tax paid by these employees on their official salaries / allowances – any increase in the amount paid by them as a result of their official salaries / allowances – would be reimbursed and paid by the Government”.
The fifth schedule of the Jammu & Kashmir Reorganization Act 2019 stipulates that these two laws will remain in force even after the reorganization of the two territories of the union became effective on 31 October.
The Ministerial Salary and Remuneration Act (Himachal Pradesh) was passed in 2000. In terms of Section 12 of the Act:
“Salaries and allowances payable to the Minister and so the house with furniture and other allowances, under this Act, will be subject to a tax levied by the State Government.”
The Act of 2000 repealed the laws passed in 1971 which also exempted the salaries and allowances of ministers and deputy ministers. Income tax paid by deputy ministers is no longer borne by the civil society council in Himachal Pradesh.
The treasure trove of the Madhya Pradesh state began to bear the tax burden of all ministers, including the secretary of Parliament, from April 1, 1994.
The government of Madhya Pradesh pays a tax on salaries for serving chief ministers and the council of ministers.
MP and MLA’s taxes
The general notion that all benefits received by Members of Parliament and Parliamentarians without tax is ended by the decision of the Visakhapatnam Bench of the Income Tax Appellate Tribunal in the case of M. Venkata Subbaiah v. ITO (2010) 7 Taxman.Com 96. Section 10 (17) of the Income Tax Act, 1961 (the Act) provides for exemption from Members of Parliament and State legislatures in respect of their full daily allowances. In the case of Members of Parliament, the amount received as a voting allowance and in the case of Trustees, that grant is tax-exempt from A.Y. 2007-08 total. The issue arose for the Tribunal to consider whether grants such as transportation, telephone, secretarial, medical, and emergency services were also taxable. The Council has determined that such benefits be exempted in accordance with the restrictions set out in Section 10 (14).
Politicians get the benefits of their positions. Such laws rob the state of moral authority to fight tax evasion. Transferring your tax burden to the government is as bad in law as tax evasion. All sectors of our country should pay taxes even if they earn less than those elected ministers, but they enjoy tax exemptions and some of them are not eligible. This is a matter of concern and something must be done in this regard. Our constitution guarantees the ‘right to equality’ and everyone must fulfill their duty by paying taxes. They should not be exempt from tax exemptions as they are also citizens of this country.
Q.1. Why Paying Taxes Is Necessary?
Ans. Taxes are levied on governments for their citizens to finance their activities to boost the country’s economy and improve the quality of life of its citizens.
Q.2. Do the Elected Ministers of Uttar Pradesh Pay Taxes?
Ans. According to Section 3 (3) of the Uttar Pradesh Department of Teachers (Wages, Grants and Various Conditions), 1981 Act, their taxes were payable but now it is scrapped off and the ministers must pay the taxes.
Q.3. Do MP’s And MLA’s Pay Taxes?
Ans. The MP’s and MLA’s are responsible for paying taxes if they receive another income otherwise, they are exempted.
Q.4. The Notion That All Benefits Received by Members of Parliament and Parliamentarians Without Tax Is Ended in Which Case?
Ans. It was ended when the decision of M. Venkata Subbaiah v. ITO (2010) 7 Taxman.Com 96 was propounded.
Q.5. Is the Benefit Given to The Elected Ministers Justified?
Ans. This is an unjust privilege given to them as such laws rob the state of moral authority to fight tax evasion. Our constitution guarantees right to equality and hence everyone should pay taxes as an obligation towards the state.