Income Tax for Politicians — MP, MLA Salary & Allowances
Updated: 3 June 2026 | Income-tax Act 2025 | Section 10(17) & Section 13A
MP and MLA salary is fully taxable. Constituency allowance and daily allowance are exempt under Section 10(17). Political parties registered with Election Commission are fully exempt under Section 13A. Politicians with total income >₹50L must disclose all assets in Schedule AL of ITR.
13A
Section 13A — registered political parties are fully exempt from income tax on all income sources.
Individual politicians (MPs/MLAs) are taxed at normal slab rates. Constituency allowance exempt under Section 10(17). 80GGC deduction for donors to political parties.
Individual politicians (MPs/MLAs) are taxed at normal slab rates. Constituency allowance exempt under Section 10(17). 80GGC deduction for donors to political parties.
Taxability of MP/MLA Income
| Income Type | Tax Status | Section |
|---|---|---|
| MP basic salary (₹1 lakh/month) | Taxable — slab rate | Section 15 |
| Constituency allowance | Exempt | Section 10(17) |
| Daily allowance (Parliament sessions) | Exempt | Section 10(17) |
| Office expense allowance | Exempt | Section 10(17) |
| Travelling allowance (parliamentary duties) | Exempt | Section 10(17) |
| MLA salary | Taxable — slab rate | Section 15 |
| Former MP/MLA pension | Taxable as pension | Section 17 |
| Rental/business income of politician | Taxable — normal rates | Respective sections |
| Agricultural income | Exempt (but must disclose) | Section 10(1) |
Section 13A — Political Party Tax Exemption
| Income Type | Exempt? | Condition |
|---|---|---|
| Voluntary contributions | Yes | Cash donations >₹20K: NOT exempt |
| Income from property | Yes | Party must be registered with EC |
| Capital gains | Yes | Accounts must be audited by CA |
| Bank interest | Yes | Return filed within prescribed time |
| Sale of publications | Yes | — |
| Cash donations >₹20,000 | NOT exempt | Violates Section 13A(d) condition |
Frequently Asked Questions
Is salary of MPs and MLAs taxable?
MP salary and allowances: MPs receive salary under the Salary, Allowances and Pension of Members of Parliament Act. Their basic salary (₹1 lakh/month) is TAXABLE as income. However, several allowances are EXEMPT: Constituency allowance: exempt under Section 10(17). Daily allowance: exempt. Office expense allowance: exempt. Travelling allowance: exempt (for parliamentary duties). Pension of former MPs/MLAs: Taxable as pension income (no special exemption). MLAs: Same principle — MLA salary is taxable; constituency allowance is exempt under Section 10(17). Full disclosure: politicians must file ITR and declare all income including salary, rental income, business income, etc.
What is Section 10(17) exemption for political persons?
Section 10(17) of Income-tax Act 2025 exempts: (i) Daily allowance received by MP/MLA as member of Parliament/State Legislature. (ii) Allowance paid to member of any committee of Parliament/State Legislature. (iii) Constituency allowance received by MPs (under the Parliament Act). Key point: Only the listed allowances are exempt — not salary. Electoral bond income or donation to political party: NOT income of individual politician (goes to party). Political parties themselves are exempt from income tax under Section 13A if registered with Election Commission and maintain proper accounts. Individual politicians' business/rental/other income: fully taxable at normal slab rates.
What income must politicians declare in ITR?
Politicians must declare in ITR: (1) Salary from Parliament/Assembly (taxable portion). (2) Rental income from properties (houses, commercial). (3) Agricultural income (exempt but must be disclosed). (4) Business/professional income. (5) Capital gains from asset sales. (6) Interest income from deposits/loans. (7) Dividends. (8) Income of minor children (clubbing). (9) Spouse's income if clubbing applies. Schedule AL (Asset Liability) in ITR: mandatory if total income > ₹50 lakh — must disclose all immovable property, jewellery, vehicles, shares, cash balance, and loans. Politicians must also file asset declaration with Election Commission — cross-checked with ITR.
How are political parties taxed in India?
Political parties: Section 13A exemption: Registered political party with Election Commission is FULLY EXEMPT from income tax — applies to: voluntary contributions, income from property (rent), capital gains, bank interest, income from sale of publications. Conditions for Section 13A: Must maintain accounts audited by Chartered Accountant. Donations >₹20,000 must be by crossed cheque/bank transfer (cash donations >₹20K lose exemption). Must submit return to Election Commissioner. 80GGC deduction for donors: individuals donating to political party can claim deduction under Section 80GGC for the amount donated. Companies: 80GGB deduction — but 100% transparent through electoral bonds (now electoral bonds scheme was struck down by Supreme Court in Feb 2024).
What are the penalties for politicians not disclosing income?
Consequences for non-disclosure: Section 276CC: failure to file return — prosecution. Section 271(1)(c): concealment penalty — 100-300% of tax on undisclosed income. Benami Transactions Act: politicians owning property in others' names face Benami Act proceedings — property attachment + prosecution. Prevention of Corruption Act: disproportionate assets beyond known income sources — criminal prosecution for public servants including elected representatives. Income Tax notices: Election Commission cross-references disclosed assets in affidavits with ITR data — mismatches trigger scrutiny. Black money: undisclosed foreign assets attract Black Money Act (2015) with flat 30% + 90% penalty.
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