Punjab govt to enact law to pay income tax on ministers' perks from exchequer

The Punjab government on Monday decided to enact a law to free state ministers and leader of opposition from the obligation of paying income tax on their perks like residential houses, though their salaries and other allowances will continued to be taxed.

The decision was taken in a state Cabinet meeting chaired by Chief Minister Amarinder Singh, said an official statement.

The new bill, to be introduced soon in the state assembly, is aimed at removing an anomaly which crept into the law enacted last year to provide for payment of income tax by ministers themselves on their salaries and allowances, the statement explained.

 

As per the provisions of section 2C of The East Punjab Ministers' Salaries Act, 1947, the Punjab government had been paying taxes on salaries, allowances and various perks of the ministers till its amendment in 2018.

The Amarinder government decided to amend the 1947 law last year on March 18 to provide for the payment of income tax by the ministers themselves on their salaries and allowances while letting the government pay the tax on their various perks like free residences etc.

But during the legislative process, the entire section 2C of the 1947 law got dropped inadvertently, leaving the ministers to pay income tax on their various perks as well, besides their salaries and other allowances.

With all ministerial perks too getting included in the tax ambit, the tax liabilities in some cases began turning out to be higher than the salary itself, the release said.

Accordingly, the state Cabinet on Monday decided to introduce a new section in place of the deleted section 2C of the 1947, said the release.

The new section will state, "The free furnished house and other perquisites admissible to a minister under this Act shall be exclusive of income tax, which shall be payable by the government.

The draft Bill for amending the 1947 law will be tabled soon in the House, said an official spokesperson.

Notably, the Punjab MLAs still enjoy tax-free salaries and allowances. The income tax on their salaries and allowances is still paid by the state government.