Salary from Parliament

SECTION 15

Income chargeable under the head ‘Salaries’

Salary paid by foreign Government - Salary paid by a foreign Government to its employees serving in India is taxable under the head ‘Salaries’ under section 15 - Circular : No. 2(LVIII-32)-D of 1966, dated 21-2-1966.

Exemption to pension - Under section 17 since salary has been defined to include pension, if salary is exempted from tax, so shall be the pension - Circular : No. 293 [F. No. 200/140/80-IT(A-I)], dated 10-2-1981.

Head of income for pension - Pension paid to the employee himself will be assessable under section 15 read with section 17, but not the pension paid to the widow. ‘Pension’ received by a widow after the death of her husband from his former employer, would rightly be assessable under ‘other sources’ - Letter : F. No. 45/118/66-ITJ, dated 21-8-1967.

Leave encashment paid to family of deceased employee - Receipt of cash equivalent of leave salary that the deceased Government employee would have got if he had gone on earned leave, by the family of the deceased employee is not liable to income-tax -Circular : No. 309 [F. No. 200/125/79-IT(A-I)], dated 3-7-1981.

The leave salary paid to the legal heirs of the deceased employee in respect of privilege leave standing to the credit of such employee at the time of his/her death is not taxable as salary - Letter : No. 35/1/65-IT(B), dated 5-11-1965.

Leave encashment is part of salary - Amounts received on encashment of leave salary due to an employee either in service or at the time of his retirement are taxable as part of salary income - Circular : No. 312 [F. No. 200/187/81- IT(A-I)], dated 31-8-1981.

Salary received by M.P. - Salary received by a person as Member of Parliament will not be chargeable to income-tax under the head ‘Salaries’ but as ‘Income from other sources’ under section 56 of the Income-tax Act - Letter : F. No. 40/29/67-IT(A-I), dated 22-5-1967.

https://law.incometaxindia.gov.in/DitTaxmann/IncomeTaxActs/2005ITAct/cirsec15.htm