Madhya Pradesh Ministers To Now Pay Their Own Income Tax As CM Mohan Yadav-Led Cabinet Strikes Down Over 50-Year-Old Rule

The Madhya Pradesh Cabinet on Tuesday (25 June) decided that state ministers will now pay their own income tax on salaries and allowances, striking down a 1972 rule under which the state government covered these taxes.

Urban Administration Minister Kailash Vijayvargiya revealed that the proposal was suggested by Chief Minister Mohan Yadav during the Cabinet meeting.

“The Chief Minister proposed that ministers should pay their own income taxes on allowances, rather than the state government covering these taxes. The Cabinet has decided to end the provision allowing the state to pay these taxes,” Vijayvargiya said.

According to section 9K of the Madhya Pradesh Ministers (Salary and Allowances) Act, “No income tax shall be levied on any Minister, Minister of State, Deputy Minister, or Parliamentary Secretary for all allowances payable to them, for the facility of a furnished residence provided without payment of rent, and for other perquisites permissible to them under this Act.”

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“The income tax, as applicable, shall be payable by the State Government at the maximum rate payable by a Minister, Minister of State, Deputy Minister, or Parliamentary Secretary,” the Act read.

Finance department officials noted that the original law aimed to relieve ministers from poor backgrounds of the income tax burden.

However, with the abolition of this practice, officials expect "direct financial savings for the state," which could lead to "better allocation of resources towards development projects and public services."

Madhya Pradesh is not alone in revising such provisions.

In 2019, the Uttar Pradesh Cabinet amended its law to require the Chief Minister and other ministers to pay their own income tax.

Similarly, the Himachal Pradesh Cabinet in 2022 mandated that all ministers and MLAs would bear their own income tax, ending the state's previous practice of covering these taxes.

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