24% MPs/MLAs say they don’t need to pay tax or have no income

By Manoj K.

In tax returns filed a year before they were elected, 72 per cent Bharatiya Janata Party (BJP) and Congress MPs and MLAs claimed they earn less than Rs 10 lakh, according to an analysis of affidavits of 4,848 (of 4,910) lawmakers.

As many as 75 per cent of MPs and MLAs nationwide declared annual incomes less than Rs 10 lakh. Around 35 per cent of lawmakers said their annual income is less than Rs 2.5 lakh while 40 per cent have declared annual income between Rs 2.5 lakh and Rs 10 lakh.

As many as 1,141 (24 per cent) 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 February 1.

Sharing income tax data, Jaitley said that of 37 million individuals (of a total population of close to 1.3 billion) who filed tax returns in 2015-16, 9.9 million (27 per cent) declared annual incomes below the exemption limit of Rs 2.5 lakh; 19.5 million (53 per cent) declared annual incomes between Rs 2.5 lakh and Rs 5 lakh, while 7.6 million (20 per cent) 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 per cent legislators' households have an income less than Rs 10 lakh.

About half (2,410) of 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 per cent 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 1 crore.

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

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

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

As many as 1,676 (35 per cent) elected representatives declared annual incomes less than Rs 2.5 lakh. Of these, 1,141 (24%) 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.

Only 38 per cent (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 per cent (1,343 of 4,848) declared family incomes less than Rs 2.5 lakh.

Half of India's elected representatives declared household assets of more than Rs 2 crore; 28 per cent more than Rs 5 crore. As many as 70 per cent 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. 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 Express reported in December 2013.

"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.

• 38 per cent (912 of 2,410) legislators with assets more than Rs 2 crore declared family incomes of less than Rs 10 lakh.
• Of 1,079 lawmakers with assets in the range of Rs 2 crore and Rs 5 crore, only 44 per cent (474) declared incomes more than Rs 10 lakh.
• 22 per cent (255 of 1,651) with assets between Rs 2 crore and Rs 10 crore declared incomes less than Rs 2.5 lakh.
• 41 per cent (891 of 2,155) with assets between Rs 2 crore and Rs 30 crore declared incomes less than Rs 10 lakh.
• Of 156 lawmakers with household assets more than Rs 50 crore, 10 declared incomes less than Rs 10 lakh.
• Of 75 legislators with assets more than Rs 100 crore, four reported incomes less than Rs 2.5 lakh.
• 7 per cent (106 out of 1,470) with assets less than Rs 1 crore declared annual incomes more than Rs 10 lakh.

  (In arrangement with IndiaSpend.org, a data-driven, non-profit, public interest journalism platform. (Manoj K. is Founder, Centre for Governance and Development. The views expressed are those of IndiaSpend. Feedback at respond@indiaspend.org)

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