Tax Exemption Order on PM Narendra Modi's Seoul Peace Prize Money of Rs 1.3 Crore Withdrawn by Finance Ministry

Team Latestly

New Delhi, August 17: Days after Prime Minister Narendra Modi wrote a letter to Finance Minister Nirmala Sitharaman, requesting to pay tax on a cash prize of Rs 1.3 crore received through the Seoul Peace Prize, Finance Ministry has withdrawn the tax exemption it had granted to the Premier. PM Modi had written a letter to Sitharaman on August 11 stating that he wishes to pay income tax on the amount like all other tax-payers in the country.

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Earlier in February, PM Modi was conferred the prestigious Seoul Peace Prize for 2018, under which he received prize money of Rs 1.3 crore. Sources revealed that Central Bureau of Direct Taxes (CBDT) had granted an exemption under section 10 (17A) (i) of the IT Act to the Premier for the Seoul Peace Prize for the assessment year of 2019-20. PM Narendra Modi Awarded Zayed Medal by UAE Crown Prince

In his letter to the Union Finance Minister, PM Modi had written, as quoted by Economic Times, "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."

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Soon after receiving the letter, CBDT was informed and through an order on August 14, the tax exemption was withdrawn. The CBDT order states, as quoted by the daily, "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."