advertisement
President Ram Nath Kovind is in Kanpur on a four-day visit. But before reaching Kanpur, he stirred up a bit of a controversy. Speaking at a public event, he said that while he does earn a healthy salary of Rs 5 lakh a month as President of India, he is not able to save much, as he pays Rs 2.75 lakh as tax every month.
He pointed out that, as a result of this, he makes fewer savings than several other officials in positions of public service.
This statement has sparked an interesting discussion on the salary and other benefits given to India’s Head of State. Is the President’s salary taxable? If yes, how much tax should he be paying? Does he receive any tax benefits, considering the significance of the office he holds? We tried to answer these questions by looking at India’s taxation laws and policies.
The President’s (Emoluments And) Pension Act, 1951, lays down provisions for the salary, emoluments, and post-retirement benefits for the person holding the office of the President of India.
In addition to the salary, the President receives other allowances, which include free housing and free medical treatment facilities (for life).
As per the reading of section 14 (heads of income) and section 10 (incomes not included in the total income) by various judgments of the Supreme Court, any income which is not specifically exempted from income tax under a law in force is considered to be taxable.
However, there is one way through which the President can avoid paying income tax. As per the Voluntary Surrender of Salaries (Exemption of Taxation) Act, 1961, if the President chooses to surrender his salary to the Consolidated Fund of India, he would be exempted from taxation.
But this exemption is not restricted to the President of India. Any person, whether their salary comes from the Consolidated Fund of India or not, who chooses to surrender their income to any of the funds administered by the Government of India, is exempted from paying income tax.
In order to calculate the income tax payable by the President, the following things are considered: his senior citizen status, whether he received income as “salary” or as “income from other sources.” and whether he has made any investments to save on tax liability.
Considering the absence of information on the President’s investments or the nature of his income, Chartered Accountant-turned-lawyer Deepak Joshi tried calculating the tax payable by the President, as per the tax slabs for salaried employees.
So, where does the figure of “Rs 2.75 lakh” come from? Joshi raises the conjecture that the President might be including the 30 percent pay-cut* due to COVID in this “tax claim.”
(*President Kovind had said that he will forego 30 percent of his salary for a year, in order to make more funds available for the country’s fight against COVID-19.)
(At The Quint, we question everything. Play an active role in shaping our journalism by becoming a member today.)
Published: undefined