Finance Ministry to Cut Tax on Seoul Peace Prize Received by PM Modi

The Finance Ministry has withdrawn the tax immunity it had granted to the cash prize of Rupees 1.3 crore received through the Seoul Peace Prize by Prime Minister Narendra Modi after he wrote to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

 In February this year, PM Modi was awarded the prestigious Seoul Peace Prize 2018. The award was given with a prize money of Rupees 1.3 crore. On 6th of March, the CBDT (Central Bureau of Direct Taxes) had granted immunity under section 10 (17A) (i) of the IT Act to the Seoul Peace Prize for the assessment year of 2019-2020.

The PM wrote to Sitharaman (Finance Minister) saying that the exemption of tax on the prize money of 1.3 crore should be re-considered. 

In the letter it was written that “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,” . He also added that whenever India wins an award at the international level like Seoul Peace Prize, every Indian’s heart swells with pride.

CBDT order

The Central Bureau of Direct Taxes through an order issued on 14th august 2019 has now withdrawn its earlier order.

The order says that “In exercise of powers granted by the Income Tax Act, the Central government withdraws the exemption granted to ‘Seoul Peace Prize’ 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".