A hole in the pocket! UP ministers to start paying tax

In a landmark move, the Uttar Pradesh government on Friday decided that the ministers will start paying their own income tax. Previously, for four decades, the UP government was filling the income tax coffers on behalf of its ministers. But with this new rule, the decades-old practice is about to change.

The decision came amid strong criticism from the media that pointed out an old law, the Uttar Pradesh Ministers' Salaries, Allowances and Miscellaneous Act 1981, that granted the ministers the privilege of being exempted from paying tax. Many in the UP government itself were unaware of any such law.

The law, enacted when Vishwanath Pratap Singh was the chief minister, has been in force during the terms of 19 CMs and about 1,000 ministers so far.

The chief ministers who saved on their taxes have been from across parties -- including Yogi Adityanath, Mulayam Singh Yadav, Akhilesh Yadav, Mayawati, Kalyan Singh, Ram Prakash Gupta, Rajnath Singh, Sripati Mishra, Vir Bahadur Singh and N D Tiwari.

"UP chief ministers and all ministers will pay their own income tax. The income tax bill till now was paid through the state treasury," Finance Minister Suresh Kumar Khanna said in a statement. "The decision has been taken on the directives of Chief Minister Yogi Adityanath," he added.

It was argued in 1981 that the state government should bear the income tax burden as most ministers were from poor backgrounds and had meager incomes, a Congress leader and a colleague of the then Chief Minister V P Singh said.

But over the years, the state has been led by leaders like Bahujan Samaj Party chief Mayawati who is worth Rs 111 crore as per her affidavit for the Rajya Sabha polls in 2012.

Another former chief minister, Samajwadi Party president Akhilesh Yadav, owns assets worth over Rs 37 crore together with his wife Dimple, according to the affidavit filed for the recent Lok Sabha polls.

According to the affidavit submitted for the Legislative Council elections in 2017, Chief Minister Yogi Adityanath’s assets total Rs 95,98,053.

Senior Congress leader and former MP, P L Punia said the provision doesn’t seem right and needs review.

"The salaries have gone up several times and there appears to be no relevance for this relaxation. It needs reconsideration and withdrawal," Punia, who was the principal secretary to Mayawati when she was chief minister, said.

Many like BSP leader and former UP finance minister Lalji Verma said they were not aware of the law. Verma said as far he remembers he used to pay his own taxes.

A section of the Act says, "The salary referred to in sub-sections (1) and (2) shall be exclusive of the tax payable in respect of such salary (including perquisites) under any law relating to income tax for the time being in force, and such tax shall be borne by the state."

In the last year alone, the state government paid Rs.86 lakh as tax, on behalf of its ministers.