Income to MP,MLA

In the case of CIT Vs. Shivcharan Mathur (supra) and has categorically held that the fundamental requirement for attracting section 15 is that, there should be a relationship of employer and employee whether in existence or in the past. Obviously and necessarily in the very nature of things for bringing about such relationship, the assessee, being the person concerned, employed by the employer and has a necessary corollary, the employer
should have right to discharge or terminate the employee.

The basic ingredient is missing in the case of MLAs and MPs as they are not employed by anybody rather they are elected by the public forming their election constituencies and in consequent upon such election that they acquire constituency position and discharge constituency functions and obligations. May be, that they receive remunerations after swearing in but that cannot be said to be the salary within the meaning of section 15.

Therefore, the remunerations received by the MLAs & MPs cannot be taxed under the head income from salary but can only be taxed under the head income from other sources.