24 percent of MLAs and MPs claim exemption from paying income tax

Manoj K

In tax returns filed a year before they were elected, 72 percent Bharatiya Janata Party (BJP) and Congress members of parliament (MPs) and members of legislative assemblies (MLAs) have claimed they earn less than Rs 10 lakh, according to an IndiaSpend analysis of affidavits of 4,848 (of 4,910) MPs and MLAs.

As many as 75 percent of MPs and MLAs nationwide declared annual incomes less than Rs 10 lakh, the analysis found. Around 35 percent of lawmakers said their annual income is less than Rs 2.5 lakh while 40 percent have declared annual income between Rs 2.5 lakh and Rs 10 lakh. As many as 1,141 (24 percent) MPs and MLAs claimed exemption from income tax or have no income at all.

“We can conclude that we are largely a tax non-compliant society,” Finance Minister Arun Jaitley said, sarcastically, during his budget speech on 1 February 2017.

Sharing income tax data, Jaitley said that of 37 million individuals who filed tax returns in 2015-16, 9.9 million (27 percent) declared annual incomes below the exemption limit of Rs 2.5 lakh; 19.5 million (53 percent) declared annual incomes between Rs 2.5 lakh and Rs 5 lakh, while 7.6 million (20 percent) declared annual incomes of more than Rs 5 lakh.

If the annual incomes of family (incomes of spouse and dependents, as declared in their respective tax returns) are added to the incomes of MPs and MLAs, 62 percent legislators’ households have an income less than Rs 10 lakh.

About half (2,410) of India’s MPs and MLAs have declared household assets (movable and immovable assets of the elected member, spouse and dependent/s) of more than Rs 2 crore, of which 912 (38 percent of 2,410) declared family incomes of less than Rs 10 lakh.

Of 1,843 MPs and MLAs with family incomes of more than Rs 10 lakh, 106 declared household assets of less than Rs one crore.

Only quarter of 4,848 MPs/MLAs declare income more than Rs 10 lakh

Only 25 percent (1,236 of 4,848) of MPs and MLAs declared in tax returns that their annual incomes were more than Rs 10 lakh; 35 percent (1,676 of 4,848) declared incomes less than Rs 2.5 lakh.

Among regional parties, 83 percent Samajwadi Party (SP) MPs and MLAs, 78 percent of All India Anna Dravida Munnetra Kazhagam (AIADMK), 68 percent of Telugu Desam Party (TDP) and 80 percent of Biju Janata Dal (BJD) lawmakers reported incomes of less than Rs 10 lakh.

For details on income ranges upto Rs 10 lakh, click here.

While 63 percent Lok Sabha MPs declared annual incomes of less than Rs 10 lakh, only 13 percent Rajya Sabha MPs declared annual incomes of less than Rs 10 lakh.

Among states, over 80 percent of MLAs in Uttar Pradesh, Bihar, West Bengal and Odisha declared annual incomes less than Rs 10 lakh.

For details on income ranges upto Rs 10 lakh, click here.

24% legislators declared no income

As many as 1,676 (35  percent) elected representatives declared annual incomes less than Rs 2.5 lakh. Of these, 1,141 (24 percent) reported to the Election Commission that they were either exempt from income tax on various grounds, such as being a farmer, being from an area mentioned in the sixth schedule of the constitution–such as the states of Arunachal Pradesh, Manipur, Mizoram, Nagaland and Tripura–and so exempt from income tax, or have no income at all.

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Total family income of MPs and MLAs

Only 38 percent (1,843 of 4848) legislators said they had annual family incomes (income of an MP or an MLA and incomes of family, such as spouse and dependents/s), more than Rs 10 lakh; 28 percent (1,343 of 4,848) declared family incomes less than Rs 2.5 lakh.

Half of all MPs/MLAs declared household assets of more than Rs 2 crore

Half of India’s elected representatives declared household assets of more than Rs 2 crore; 28 percent more than Rs 5 crore. As many as 70% of MPs and MLAs had assets more than Rs 1 crore.

Although assets are supposed to be declared by elected representatives at market price, immovable assets are grossly under valued, Indian Express reported in December 2013.

A former Election Commissioner said the law was not being used to value assets by lawmakers accurately and urged people to go to court to force lawful evaluations, Indian Expressreported in December 2013.

The correlation between assets and incomes of MPs and MLAs

“How long will we overlook facts that stare us in the face?” Prime Minister Narendra Modi said on December 31, 2016. “ I wish to share some information with you, which will either make you laugh, or make you angry. According to information available with the government, only 24 lakh people in India accept that their annual income is more than Rs 10 lakh.”

“If we look at any big city, it would have lakhs of people with annual income of more than Rs 10 lakh. Do you not feel that for the good of the country, this movement for honesty needs to be further strengthened?”

In some way, the Prime Minister drew a correlation between assets and income declared to tax authorities. We found a weak correlation existed between the assets and incomes of MPs and MLAs.

Income-Assets Correlation Of Lawmakers

Household Asset ValueSelf-Declared Annual Family Income
> Rs 10 lakhRs 5-10 lakhRs 2.5-5 lakh< Rs 2.5 lakh
< Rs 1 crore106289297778
Rs 1-2 crore239313160256
Rs 2-5 crore474286127192
Rs 5-10 crore388873463
Rs 10-30 crore402431742
Rs 30-50 crore88605
Rs 50-100 crore76203
> Rs 100 crore70104

 

a. 38% (912 of 2,410) legislators with assets more than Rs 2 crore declared family incomes of less than Rs 10 lakh.
b. Of 1,079 lawmakers with assets in the range of Rs 2 crore and Rs 5 crore, only 44% (474) declared incomes more than Rs 10 lakh.
c. 22% (255 of 1,651) with assets between Rs 2 crore and Rs 10 crore declared incomes less than Rs 2.5 lakh.
d. 41% (891 of 2,155) with assets between Rs 2 crore and Rs 30 crore declared incomes less than Rs 10 lakh.
e. Of 156 lawmakers with household assets more than Rs 50 crore, 10 declared incomes less than Rs 10 lakh.
f. Of 75 legislators with assets more than Rs 100 crore, four reported incomes less than Rs 2.5 lakh.
g. 7% (106 out of 1,470) with assets less than Rs 1 crore declared annual incomes more than Rs 10 lakh.
h. As many as 2,410 elected representatives (MPs/MLAs) declared household assets of more than Rs 2 crore, of which 912 (out of 2410, 38%) disclosed family incomes less than Rs 10 lakh.

MPs/MLAs with incomes more than Rs 10 lakh

Of 1,843 (38% of 4,848) elected representatives who declared family annual incomes more than Rs 10 lakh, 345 (19% of 1,843) declared assets less than Rs 2 crore. As many as 903 MPs and MLAs declared family incomes between Rs 10 lakh and Rs 20 lakh; 410 declared more than Rs 50 lakh.

Income-Assets Correlation Of Lawmakers With Annual Income Over Rs 10 Lakh

Household Asset ValueSelf-Declared Annual Family Income
> Rs 10 croreRs 1-10 croreRs 50 lakh to Rs 1 croreRs 20-50 lakhRs 10-20 lakh
> Rs 100 crore16351252
Rs 50-100 crore24411910
Rs 30-50 crore131261713
Rs 10-30 crore36472159104
Rs 5-10 crore01640140192
Rs 2-5 crore0623138307
Rs 1-2 crore01746185
< Rs 1 crore0001690

 

Note: All data sourced from affidavits filed by the MPs and MLAs with the Election Commission of India, and correspond to the year preceding their election.

(Manoj K is a graduate of the Indian Institute of Technology, Delhi, and the founder of the Centre for Governance and Development. He has a special interest in transparency and accountability in governance and has spearheaded several projects on these subjects.)


Published Date: Feb 16, 2017 02:03 pm | Updated Date: Feb 16, 2017 02:05 pm

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