Finance Ministry to cut tax on prize post PM nudge : 17-08-2019

The Finance Ministry has withdrawn the tax exemption it had granted to the cash prize of Rs 1.3 crore received through the Seoul Peace Prize by Prime Minister Narendra Modi after he wrote to Finance Minister Nirmala Sitharaman on August 11 saying he wished to pay income tax on the amount like all other tax-payers in the country. 

PM Narendra Modi was conferred the prestigious Seoul Peace Prize for 2018 this February and the award came with a prize money of Rs 1.3 crore. On March 6, the Central Bureau of Direct Taxes (CBDT) had granted exemption under section 10 (17A) (i) of the IT Act to the Seoul Peace Prize for the assessment year of 2019-20, sources have told ET. 

The PM wrote to Sitharaman on August 11 saying the exemption should be re-considered. ET has a copy of the said letter. “I have learnt that the Finance Ministry passed an order waiving off income tax from the prize money. Due to Lok Sabha elections and other commitments, I could not write to you earlier. I wish to request you that this prize money should be subjected to the same income tax provisions that are applicable to crores of other tax-payers in the country. The income tax proceeds go   into the exercise of nation-building. Hence, I request you to reconsider the earlier order of giving the tax exemption and withdraw it,” the PM wrote to Sitharaman on August 11. He added that whenever India wins an award at the international level like Seoul Peace Prize, every Indian’s heart swells with pride. 

The CBDT, through an order on August 14, has now withdrawn its earlier order. “In exercise of powers granted by the Income Tax Act, the Central government withdraws the exemption granted to ‘Seoul Peace Prize’ (vide order issued on March 6) and the said order shall be considered to have been never issued. The Award, so received, will be subject to the Income Tax Act, 1961 for all taxation purposes,” the CBDT order says. 

Source : Financial Express

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