Remuneration received by a Member of a State Legislature (i.e. Assemblies and Councils) will also be assessable as 'income from other sources' under section 56 of the Income-tax Act, 1961. - Income Tax - 512/CBDT

INSTRUCTION NO. 512/CBDT Dated : Feburary 23, 1973 Section(s) Referred: 56 Statute: Income - Tax Act, 1961 The Board had recently an occasion to examine the question as to whether the "Salaries and Allowances' of the Members of the State Legislative Assemblies are assessable as 'Income from other sources' under section 56 of the Income-tax Act, 1961 or as 'salaries' under section 15 of the said Act and also whether any expenses should be allowed as deduction under section 57(iii) out of the remuneration of the M.L.As, in case the amounts are assessable under the head 'Income from other sources'. 2. Reference is invited to Board's letter F.No.40/20/67-IT(AI) dated 16.11.1968 wherein instructions were issued that the salary received by a Member of Parliament would be assessable under the Head 'Income from other source'. The cases of Members of the State Legislatures are similar to those of the Members of Parliament. It has accordingly been decided that the remuneration received by a Member of a State Legislature (i.e. Assemblies and Councils) will also be assessable as 'income from other sources' under section 56 of the Income-tax Act, 1961. In view thereof, no tax is deductible at source on such remuneration. 3. Reference is also invited to Board's letter F.No. 200/15/70-IT(AI) dated 22.5.1970 wherein instructions were issued regarding the deduction of expenses under section 57(iii) against the allowances of a Member of Parliament. Following the decision contained in the said letter, it has also been decided by the Board that for the sake of uniformity and administrative convenience a deduction of Rs.100 per month or 1/5th of the monthly allowance, whichever is less, should be allowed as a deduction irrespective of the fact whether the Member of the State Legislature (i.e. Assemblies and Councils) is in receipt of conveyance allowance or not. Deductions to the extent indicated above should be allowed without making any enquiries subject to a claim being made in this behalf. In cases, where expenditure higher than the above limit is claimed, a broad check of the expenditure actually incurred should be made. 4. These instructions will apply to all the pending assessments. Assessments already completed need not be reopened. Necessary instructions may please be issued to the Income-tax Officers working under your charge.