How salary of a Member of Parliament is different from the salary of employees

Mr. Kanakaraj is employed at Golden Tech. He gets his salary, and perquisites from the company, after deducting applicable taxes.

Mr. Abhishek is a Member of Parliament (MP). He also gets his salary, and perquisites from the Government of India after deducting applicable taxes. Additionally, he also gets a lifetime pension, post his tenure as MP

A plain reading of both cases looks alike. But there are noticeable differences.

Mr. Kanakaraj gets an Appointment Letter, he is bound by the rules of the company, he is permitted to take leave as per the leave policy, he has to work as per the direction of the management, and if he does something wrong, it is questionable, violations punishable, can’t do parallel business, so and so forth

What about Mr. Abhishek? The government has not appointed him! There is no SOP (Standard Operating Procedures) or JD (Job Description). He can take leave as per his wishes. He can work from home, home office, or public office at his constituency or office in Delhi, at his will and choice. He is allowed to conduct his own business-like educational institution, hospitals, or companies. He can operate public affairs from his private place; dare not ask him. He is free to do what he feels like.

What does this mean? An MP Or MLA is not a servant of the Government. He shares the master-servant relationship with the people of his constituency. The people are the masters and he is the servant (modestly, call him an employee). The people can question him and no one else!

If people are the masters, why do they find it difficult to meet or greet or talk to the employee, say, MP or MLA? Isn’t the norm for the masters to order or give directions to employees? I don’t find anything strange here. If there are 1,00,000 masters and one servant (MP), it is difficult to meet him!

Look at the other way, if you are hired in a company that has 1,00,000 employees; can you meet the Managing Director or Owner or Master (CEO) of the company? Easily? Hard to meet, right?

In the case of employment, there are two parties involved, the company and employees; In the case of MP/MLA, apart from master and servant, there is a third element called the Government which takes care of salary and perquisites.  A unique proposition.

Let me now link this to the Income Tax. The salary received by the employees is considered under the head of Salary Income whereas the salary received by the MP / MLA is classified under Income from Other Sources, (as there is no employer and employee relationship) and taxed accordingly.

The last punch line – In a way, it is right! Many MP/MLA may have income “from other sources”, rightfully categorized under the Income Tax Act.

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About B E Kumar Prasad

B E Kumar Prasad
He is a Practicing Chartered Accountant in Bengaluru, India. He has 28+ years of experience in income tax, business setup, and NRI matters. He is also an Insolvency Professional, Registered Valuer (F&SA) and Social Auditor.Prasad welcomes your comments and questions. Please email him at simplifiedlaws20@gmail.com

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S R Muralidhar
S R Muralidhar
1 year ago

Very difficult to make comparisons but a person with minimum IQ can read between the lines
It will take eons before there is a slight chance of change ever happening

Ram K Navaratna
1 year ago

Good write up. I like it

Sreedhar M.K
Sreedhar M.K
1 year ago

A very good analysis! MP/MLAs get their “remuneration “ from the consolidated fund of India, which is contributed by tax payers/ Ppl who elect them!, I suppose!

If the remuneration received by MP/ MLAs are treated as “Income from Other Sources, would they be entitled to other benefits like a “ salaried” person, say Std Deduction etc?!

I think there is an old Madras HC decision in the case of Shri Karuna Nidhi, dealing with the concept of Employer – Employee relationship!

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