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Ministers free of tax worries

THE MADHYA Pradesh ministers are perhaps the only one in the country who enjoy the privilege of their taxes being paid by the State Government. And this tax liability soared to Rs 45 lakh annually in the year 2001-02 but came down to Rs 35 lakh last fiscal because of fewer number of ministers.

india Updated: Jan 15, 2006 20:19 IST

THE MADHYA Pradesh ministers are perhaps the only one in the country who enjoy the privilege of their taxes being paid by the State Government. And this tax liability soared to Rs 45 lakh annually in the year 2001-02 but came down to Rs 35 lakh last fiscal because of fewer number of ministers.

The ministers have been enjoying this facility from the past eight years following an amendment in Mantri Vetan Tatha Bhatta Adhiniyam 1972.

The other VVIPs whose tax is being paid by the State Government include the Chief Minister, Speaker, Deputy Speaker and Leader of Opposition. According to sources, State Government paid an amount of about Rs 35 lakh as tax of these VIPs during last fiscal.

Interestingly, majority of the ministers in the State have no personal income. As a result of this, all their tax liabilities are being paid by the State Government. However, there are a few likes Rustam Singh and Kunwar Vijay Shah who pay taxes on their personal income.

With the three-fold increase in salary and allowances of MLAs and ministers a couple of years ago, their tax liability increased manifold. They were also made liable to pay actual expenses incurred by the State Government on various perquisites and allowances. Earlier, it was based on certain valuation system whereby tax was being imposed on notional value of their perquisites.

The State Government paid Rs 8 lakh as income tax for Ministers in 2001-02, which soared to Rs 45 lakhs during 2002-2003. During last fiscal also the State Government paid about Rs 35 lakh. The amount of tax went down because of
reduction in number of ministers and increase made in the limit of standard deduction.

The State Assembly had unanimously passed the amendment to the Mantri Vetan Tatha Bhatta Adhiniyam 1972 on June 13, 1997, following which, the liability of payment of perquisites and allowances of ministers was passed on to the State Government.

“Ministers have no income tax liabilities in Madhya Pradesh. The State Government takes care of their dues to the IT Department,” said a leading tax practitioner of the city.

Due to this facility, the ministers and other politicians of Madhya Pradesh holding constitutional posts don’t have to worry about their taxes.

“This is a sort of magic payment under which the State Government gets 80 per cent of the tax it pays on behalf of ministers as instant payment and remaining 20 per cent for plan expenditure,” he added. Talking to the Hindustan Times he said that this facility is available to politicians only for the ‘allowances and perquisites’ given to them as ministers. However, they have to pay taxes on their personal income.

When contacted, Law and Legislative Minister Narottam Mishra admitted that the State Government is taking care of tax liabilities of ministers.


Interestingly, majority of the ministers in the State have no personal income. As a result of this, all their tax liabilities are being paid by the State Government.

First Published: Jan 15, 2006 20:19 IST