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Mps and mlas

Sunshine (Helping All) (10575 Points)

19 July 2013

We know that pay received by a Member of parliament is Taxaxble as IOS not under the Salary head.......

What abt the pay received by members of state assembly?? Will it be taxable under IOS or Salary??

I saw a question in Singhania's book where they taxed it under Salary in case of an MLA.....is it correct???

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CA SURENDRA KUMAR RAKHECHA (Practising CA at Surat) (26258 Points)
Replied 19 July 2013

MLA AND MPs are not SERVING at all. (We all know better).

Hence there is no question remains unanswered that the government has "employed" them.

Coming to Income-Tax Point of view; to decide whether a payment falls under SALARY or not; one has to see whether EMPLOYEE-EMPLOYERS RELATIONSHIP do exists.

Since these members are elected by the public;

hence it can't be said that they are employees of the government.

Hence payment to them is in the nature of INCOME FROM OTHER SERVICES.

(Services i.e. income which can't be defined well (to decide the head);

falls under the head : Income from other sources.

Further how politicians earn; can't be DEFINED).

4 Like

CA SURENDRA KUMAR RAKHECHA (Practising CA at Surat) (26258 Points)
Replied 19 July 2013

If still you have doubt -

I am raising the following query before you :

The amount of remuneration what they are drawing; is decided by themselves by passing the resolutions.

This is UNIQUE SYSTEM to decide "salary" for self - which is not possible ELSEWHERE.

Can an employee decide his own salary?

1 Like

Ayyswariya RG (Knowledge Seeker) (3711 Points)
Replied 19 July 2013

Just now came to know that MP's and MLA's can decide their salary. No wonder why they are money minded

J S BHAVSAR (CONSULTING) (1288 Points)
Replied 19 July 2013

Is'nt the amount per month given to the MPs and MLAs termed as "tax free royalty"?

work is worship (Service) (2728 Points)
Replied 20 July 2013

The remuneration received by both MPS and MLAS are taxed under the head Income from Salaries as there exist no employer and employee relationship...

Rahul Verma (Accountant) (98 Points)
Replied 20 July 2013

Originally posted by : work is worship
	The remuneration received by both MPS and MLAS are taxed under the head Income from Salaries as there exist no employer and employee relationship...

No, actually their remuneration is termed as income under the head other sources , not salary. As there exist no employer- employee relation.

CA PARAS BAFNA (Practising CA ) (33423 Points)
Replied 23 July 2013

Originally posted by : Sunshine
	I saw a question in Singhania's book where they taxed it under Salary in case of an MLA.....is it correct???

We have to go in flaash -back or ahead while we read Singhanis's book on Direct Taxes.

For understanding the case we have to apply similar strategy to interpret the term "Servant" .

Basically , MPs and MLAs , when are not elected, they beg for votes in the name of service of the nation or service of the public. These chaps ( not CHAP LOOSES) demand votes in the similar manner as if an unemployed applies for a Job.

After getting a job past becomes a history -to which hardly any one desires to recall. We have many examples where servants have become the Bosses.

Further, without exceptional provisions -If you read subjects like Direct Taxes, you will get bored.

So, I presume that -an exceptional case has been discussed in Singhania Sirs' Book.

Yes... I am coming to the EXCEPTIONAL case.

This was the case of an "HONEST" MLA ....

from whom -charging fee directly was too difficult for the tax consultant also.

So, the Tax -consultant applied the provisions in the manner suitable to the case .

He was knowing the fact that the....thes... these law-makers never understand the law made by their own.

And.... what about TDS provisions..... ????????. TDS deducted or not.....