Income tax payment of Bihar CM & legislators discontinued in 1998-99

PATNA: The Bihar government discontinued the practice of paying the income tax of chief ministers, ministers and other legislators in the 1998-99 financial year, cabinet secretariat department sources said on Monday.
The issue has come to the fore in the backdrop of the continuance of a practice in Uttar Pradesh where the government has kept paying the income tax of ministers and legislators for around four decades in accordance with the Uttar Pradesh Ministers’ Salaries, Allowances and Miscellaneous Act, 1981, framed under the then CM V P Singh.
Sources in the state cabinet secretariat department said a similar practice had come into effect in the state in the early 1980s, but it was discontinued in 1998-99 under the rule of former CM Rabri Devi. “The discontinuance of the practice happened a year before the creation of Jharkhand as a separate state in November 2000,” a source said.
It is learned that the cabinet secretariat department, which prepares the salaries of CM, ministers and legislators, used to send to the office of Accountant General (AG) here for clearance the amount of income tax that had to be paid by the state government on behalf of the ministers and legislators.
By rule, be it the CM or any other minister, their salaries are equivalent to what a legislator gets, barring that of CM who enjoys notionally high guest allowance.
“The AG office used to revert/return the sum (income tax amount) to the state government as income accrual in the account of the minister or legislator concerned. It kept on happening till 1998-99, when it was discerned that a very high amount of around Rs4 crore was to be paid to the income tax department by the government on behalf of them,” a source said.
It is learnt that the income tax accrual deemed to be as income of a minister or legislator had come to around Rs1 lakh per head, totalling around Rs3.99 crore for all. “At that time, it was a very high amount for a state that was starved of resources and occasionally ran on overdrafts from the RBI. Therefore, the practice was discontinued and has remained so till date,” a source said.
At present, monthly amount paid to the CM, minister or legislator is to the tune of Rs2.07 lakh. That includes the salary scale of Rs40,000 and Rs1.67 lakh as allowances, which are non-taxable.