Does Income Tax Apply to the Salaries of CMs and Ministers?

While ordinary employees are required to pay income tax on taxable income as per the applicable rules, a specific provision exists for the Chief Minister and ministers in Andhra Pradesh and Telangana. Under Section 3(4) of the respective Payment of Salaries and Pension and Removal of Disqualifications Act, the state government bears the income tax payable on the salary, allowances and perquisites covered under the law.

The provision applies only to the salary, allowances and perquisites specified under the respective law and does not cover a minister’s other personal income. In effect, the tax liability covered by this provision is paid from the state government’s finances rather than being paid personally by the Chief Minister or minister. The Telangana law was adapted from the law applicable to the undivided Andhra Pradesh after the state’s bifurcation.