The Madhya Pradesh government has decided that state ministers will now be responsible for paying their income tax on salaries and allowances. This decision marks the end of a 52-year-old rule from 1972, under which the state government had covered these taxes.
In its recent meeting, the Madhya Pradesh Cabinet approved the proposal that Chief Minister Dr. Mohan Yadav suggested. Urban Administration Minister Kailash Vijayvargiya stated, “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.”
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. 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.”
This provision was initially enacted to ensure that ministers from poor backgrounds did not have to bear the income tax burden. However, the current administration believes that this practice is no longer necessary and that it is time for ministers to take on this financial responsibility.
Officials from the Finance Department highlighted the financial benefits of this decision, noting that there would be “direct financial savings for the state,” which would lead to “better allocation of resources towards development projects and public services.” An official commented, “Ministers paying their own taxes fosters a culture of responsibility and aligns with public expectations of transparency in governance. This will also reduce unnecessary expenditure from the state budget, allowing funds to be redirected to other essential services and development projects. The state is currently reeling from a financial burden…”
This move by Madhya Pradesh follows similar actions taken by other states. In 2019, the Uttar Pradesh Cabinet amended the law that exempted the Chief Minister and other ministers from paying their income tax. Similarly, in 2022, the Himachal Pradesh Cabinet mandated that all ministers and MLAs would pay their income tax, a cost the state government had previously covered.
The Chief Minister further said that it was also decided that, in the case of the martyrdom of any soldier from the state, 50 per cent of the total assistance amount would be given to the wife and the remaining 50 per cent to the parents of the martyr.
