Do the President, Prime Minister, and High Officials Pay Income Tax? Know Limitations and Exemptions

Today, as we celebrate the 76th Republic Day of India, a day that marks the adoption of our Constitution and the ideals of justice, equality, and liberty, let’s take a closer look at the individuals who safeguard these principles. From the President, the symbolic head of state, to the Prime Minister, the leader steering the nation, and the esteemed Judges of our Supreme Court and High Courts, these high-ranking officials play important roles in our democracy.

But have you ever wondered about the salaries, perks, and tax liabilities of these dignitaries? Do they contribute to the nation's tax system like regular citizens? What exemptions do they enjoy, and why? Today, we will discuss these intriguing aspects, offering a glimpse into the financial frameworks that govern some of the most powerful positions in the country. Let’s explore!

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Do They Pay Income Tax?

The short answer is yes—most constitutional officeholders, including the Prime Minister and MPs, pay income tax like ordinary citizens. However, the President of India is an exception, as their salary is fully tax-exempt under the Constitution of India.

Here’s a detailed explanation of their earnings, tax liabilities, and exemptions:

The President of India

As the highest constitutional authority in India, the President serves as the ceremonial head of state. While the role is largely symbolic, it comes with significant responsibilities and perks.

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Salary and Benefits:

• Monthly Salary: Rs. 5,00,000
• Allowances: Rs. 4 lakh for constituency expenses and Rs. 2.5 lakh for travel, entertainment, and estate maintenance.
• Perquisites:
  • Free official residence at the Rashtrapati Bhavan.
  • Free medical care.
  • Domestic staff, vehicles, and air travel facilities.

Tax Liability:                                                                    

The President’s salary is fully exempt from income tax under the Constitution of India. This exemption underscores the unique status of the President's office and ensures financial independence.

Post-Retirement Benefits:

• Pension: Rs. 1.5 lakh per month.
• Rent-free accommodation.
• Free medical care, travel, and office expenses.

At an event in Kanpur’s Jhinjhak railway station happened 3 years ago, Former President Ram Nath Kovind candidly shared insights about his earnings, taxes, and the importance of being a responsible taxpayer. Speaking during his visit to his hometown, the President discussed how his salary is often a topic of public debate, revealing that more than 50% of his monthly income is paid in taxes.

The President shared details about his monthly salary, which totals Rs. 5 lakh. However, he pointed out that approximately Rs. 3 lakh is deducted as income tax, leaving him with less than Rs. 2 lakh. He stated:

"But someone might say, 'Look at what you receive.' Everyone talks about what you get, that you receive Rs. 5 lakh, but out of that, almost Rs. 3 lakh goes straight to taxes every month. Whatever remains is what we are left with."

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The Prime Minister of India

The Prime Minister of India, as the head of government, wields significant executive authority. The Prime Minister’s income is subject to taxation under regular provisions.

Salary and Benefits:                                        

• Monthly Salary: Rs. 1,66,000
  • Basic Pay: Rs. 50,000
  • Parliamentary Allowance: Rs. 45,000
  • Expense Allowance: Rs. 3,000
  • Daily Allowance: Rs. 2,000 (during Parliament sessions).
• Perquisites:
  • Official residence at 7, Lok Kalyan Marg, New Delhi.
  • Security is provided by the Special Protection Group (SPG).
  • Government vehicles and aircraft, including Air India One, for official travel.
  • Free medical care.

Tax Liability:

The Prime Minister is liable to pay income tax on their earnings as per the applicable tax slabs. However, allowances for official purposes may be partially or fully exempt under tax laws.

Post-Retirement Benefits:                                                     

• Free housing and utilities.
• SPG security for five years.
• Free medical care and travel.

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Members of Parliament (MPs) in India

Members of Parliament (MPs) in India enjoy a range of salaries, allowances, and perks that reflect the significance of their responsibilities. Here's a breakdown of their income and benefits:

Salary and Allowances

• Monthly Salary: Rs. 1,00,000
• Constituency Allowance: Rs. 70,000 per month to cover expenses related to constituency duties.
• Office Allowance: Rs. 60,000 per month for office management and secretarial assistance.

Perks and Benefits                                 

• Medical Facilities: Free medical care for MPs and their families under the Central Government Health Scheme (CGHS), which includes treatments at government and empaneled private hospitals.
• Travel Benefits:
  • 34 domestic flights annually, which can be used by MPs or their family members.
  • Unlimited first-class train travel for both personal and official purposes.
• Housing:
  • MPs are provided with rent-free accommodation in prime areas of New Delhi, such as bungalows, flats, or hostels.
  • Alternatively, those who opt out of government housing receive a housing allowance of Rs. 2 lakh per month.
• Telephone Benefits: Rs. 1.5 lakh per year for communication expenses.
• Utilities:
  • 50,000 units of free electricity annually.
  • 4 lakh liters of free water annually.
  • Post-Retirement Benefits
• Pension: Rs. 25,000 per month after completing at least one term in Parliament. This increases by Rs. 2,000 for every additional year of service.

Taxable Components:

• Basic Salary: The monthly salary of Rs. 1,00,000 is fully taxable under the Income Tax Act, 1961.
• Pension: Post-retirement pensions of Rs. 25,000 per month (or higher for longer service) are also taxable.

Tax-Exempt Components:

• Constituency Allowance: Rs. 70,000 per month is exempt under Section 10(14) of the Income Tax Act, provided it is used for constituency-related expenses.
• Office Allowance: Rs. 60,000 per month is partially exempt if used for official purposes like hiring staff or maintaining an office.
• Perquisites: Benefits such as free housing, travel, telephone usage, and utilities (electricity and water) are generally not included in taxable income.

Special Provisions:

MPs file their taxes like any other taxpayer under the applicable income tax slabs. They can claim deductions and exemptions on eligible expenses and investments as per the provisions of the Income Tax Act.

Judges of the Supreme Court and High Courts

The judiciary is a cornerstone of Indian democracy. Judges of the Supreme Court and High Courts receive significant salaries and allowances, reflecting the importance of their role.

Salary and Benefits (as of 2018 revisions):

• Chief Justice of India (CJI):
  • Salary: Rs. 2,80,000 per month.
  • Pension: Rs. 16,80,000 per annum + Dearness Relief (DR).
  • Gratuity: Rs. 20,00,000.
• Supreme Court Judges:
  • Salary: Rs. 2,50,000 per month.
  • Pension: Rs. 15,00,000 per annum + DR.
  • Gratuity: Rs. 20,00,000.
• Chief Justices of High Courts:
  • Salary: Rs. 2,50,000 per month.
  • Pension: Rs. 15,00,000 per annum + DR.
  • Gratuity: Rs. 20,00,000.
• High Court Judges:
  • Salary: Rs. 2,25,000 per month.
  • Pension: Rs. 13,50,000 per annum + DR.
  • Gratuity: Rs. 20,00,000.

Allowances:       

• Furnishing Allowance: Rs. 6–Rs. 10 lakh, depending on designation.
• HRA: 24% of basic salary, increasing to 27% or 30% with rising Dearness Allowance (DA).
• Sumptuary Allowance: Rs. 27,000–Rs. 45,000 per month.

Tax Liability:                                                        

Under Section 23D of the Supreme Court Judges (Salaries and Conditions of Service) Act, 1958, certain perquisites provided to judges are exempt from income tax:

• Rent-free official residence.
• Conveyance facilities.
• Sumptuary allowance.
• Leave travel concessions (LTC).

Other income unrelated to their judicial role is taxable as per the standard laws.

Governors of States

Governors act as the constitutional head of each state, representing the President.

Salary and Benefits:

• Monthly Salary: Rs. 3,50,000.
• Perquisites:
  • Rent-free official residence.
  • Free medical care.
  • Travel and staff allowances.

Tax Liability:        

Governors are required to pay income tax on their salaries, with no specific exemptions.

Sources of Payment:

• Salaries, allowances, and pensions of Supreme Court Judges are charged on the Consolidated Fund of India.
• For High Court Judges, salaries and allowances are charged to the Consolidated Fund of the respective states, while pensions come from the Consolidated Fund of India

Periodic Revision:

• Salaries and allowances of constitutional officeholders are reviewed and revised through legislative amendments based on recommendations of Pay Commissions or judicial committees.
• The most recent revision for judges came into effect on 1 January 2016.

Financial Provisions and Oversight

Sources of Payment: Salaries, allowances, and pensions of Supreme Court Judges are charged to the Consolidated Fund of India. For High Court Judges, salaries and allowances are charged to the Consolidated Fund of the respective states, while pensions come from the Consolidated Fund of India.

Periodic Revision: Salaries and allowances of constitutional officeholders are reviewed and revised through legislative amendments based on recommendations of Pay Commissions or judicial committees. The most recent revision for judges came into effect on 1 January 2016.

Conclusion                                 

In conclusion, official records clearly state these salaries and allowances. However, whether these are the only sources of income for these positions could spark further discussion and debate. On this Republic Day, let us pledge to contribute to India's growth and prosperity by paying our taxes on time. Wishing everyone a Happy Republic Day!

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