Member of Parliament entitled to receive an allowance at the rate of Rs.500/- per month. - Income Tax - 961/CBDT

INSTRUCTION NO. 961/CBDT Dated : June 17, 1976 Section(s) Referred: 57(iii) Statute: Income - Tax Act, 1961 The Members of Parliament (Additional Facilities) Rules, 1975 which came into force on the first day of September 1975 has provided that a Member of Parliament shall be entitled to receive, in lieu of additional facilities, an allowance at the rate of Rs.500/- per month. The rule also provides that "additional facilities" means such of the housing, postal, water, electricity, constituency and secretarial facilities as are not covered by any other rule. 2. The Finance Act 1976 has amended section 10(17) of the Income-tax Act 1961 by which allowances received by a Member of either House of Parliament under the Members of Parliament (Additional Facilities) Rules 1975, have been exempted. 3. The Board has examined the question whether in view of the specific exemption having been granted under section 10(17) to the allowances received by a Member of Parliament for additional facilities, any further deduction in respect of expenditure needs to be allowed under section 57(iii) of the Incometax Act 1961 with particular reference to its earlier Instruction F.No.200/15/70-IT(AI) dated the 22 May 1970. In view of the fact that the Members of Parliament are now in receipt of a sum of Rs.500/- per month for meeting expenditure incurred by them in respect of housing, postal, water, electricity, constituency and secretarial facilities, the minimum deduction of Rs.100/- p.m. to be allowed under the Board's Instructions referred to above need not be allowed with effect from 1.9.75. However, in case a claim is made that the actual expenditure incurred is more than Rs.500/- per month then the ITO may examine the evidence adduced and allow such expenses over and above Rs.500/- per month under section 57(iii) of the Income-tax Act 1961 while computing the income of the Member of Parliament. 4. These instructions may please be brought to the notice of all the officers and it may be ensured that no attempt is made to tax the sum of Rs.500/- which is received by the Members of Parliament under the Members of Parliament (Additional Facilities) Rules, 1975.