The taxation on the salary of the President of India became a point of contention on social media, when President Ram Nath Kovind told a gathering at Kanpur, Uttar Pradesh, that he pays ₹2,75,000 as taxes on his monthly salary of ₹5 lakhs. President Kovind was trying to draw the crowd's attention to the fact that while his monthly pay may seem lucrative at face value, he does pay a substantial sum by way of taxes.
BOOM found that while the President of India may be entitled to a number of benefits under the President's (Emoluments) and Pension Act, 1951, there is no evidence in the Act to state that his ₹5 lakh per month salary is tax free.
"We [Presidents] pay tax at ₹2,75,000 a month. But everybody talks about getting ₹5 lakh [a month]. But then, a ₹2.75 lakhs goes as taxes. How much is left? And of how much is left; a greater amount is earned by our officers. Teachers earn the most. The undertone to this is to show that taxes go towards development. Who will be at a disadvantage? You and me."
This would indicate that he pays 55% of his monthly salary as tax. There are no official records of the break-up of the President's income in the public domain.
This statement can be seen below.
This gave rise to a number of claims on social media saying that his income was legally tax free.
Here's all we know about the taxation of the president.
1. What does the president earn?
According to the President's (Emoluments) and Pension Act 1951, the President of India earns ₹5 lakh a month. However, there is nothing in the Act which states that his income by way of the constitutional office is tax free.
"The Constitution provides that the President's emoluments, allowances and privileges will be decided by the Parliament. The salary of the President of India is thus determined by the 1951 President's (Emoluments) and Pensions Act. Through an amendment to the Finance Bill in 2018, the President's salary was last revised to Rs. 5 lakh rupees per month. Neither the Constitution nor the President's (Emoluments) and Pensions Act, 1951 exempt the Heads of State from taxation", Mridhula Raghavan, Program Manager responsible for media and citizen outreach at PRS Legislative told BOOM.
The Act can be seen below.
The Act also lays certain other perks the president gets as part of being in office:
- A fully furnished residence without payment of rent or maintenance
- An automobile's usage for free
- Communication like mobiles and broadband
- A secretariat including secretaries, personal assistants and peons
- Free medical treatments and attendance
- Pan-India travel via air, railways or ship
Further, the President of India is entitled to a pension of fifty per cent of pay for the remainder of her life.
However, none of these payments are tax free.
Similar Acts govern the emoluments to ministers including the Prime Minister of India, the Union Council of Ministers and the Vice President also exist, and none of them give out tax free salaries. Though, those occupying these positions too are entitled to similar perks like automobiles, medical treatment, residential arrangements, secretariats and travelling provisions.
Find the text of the Act here.
2. How much tax does the President of India pay?
BOOM did not find publicly available data on the quantum of tax paid by the President of India.
BOOM also reached out to Rashtrapati Bhavan's media incharge but was unable to get anyone to comment.
In May last year, 75-year old President Kovind had indicated that he would take a 30% cut in his salary in solidarity with the fight against COVID-19. Therefore, a salary of ₹5 lakh a month would translate to ₹60 lakh a year; a 30% cut would indicate that he would have drawn a salary of ₹42 lakhs in financial year 2021 (translating to ₹3.5 lakh a month).
But how much tax would both these income options translate to?
Harsh Roongta, Founder of Fee Only Investment Advisers LLP, a SEBI registered Investment Advisory firm, told BOOM, "Assuming that total income is based on salary, a senior citizen resident earning ₹60 lakh per year would have a tax liability of ₹18,24,680 under the old tax slabs. The same person earning ₹42 lakh per year would have a tax liability of ₹10,97,200 under the same slabs."
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