Now, the lPG subsidy received by individuals in their bank accounts will continue to be exempt from income tax clarified the Finance Ministry on Tuesday. The clarification follows doubts being raised by tax experts over an amendment in Finance Bill, 2015 that expanded the definition of taxable income to include subsidies, grants, cash incentive and duty drawback.
“The provision in the Finance Bill, 2015, will not affect the lPG subsidy and other welfare subsidies received by individuals,” the Ministry said in a statement.
The Government continues to subsidise 12 cylinders of 14.2-kg each to households in a year. This subsidy is paid directly into bank accounts of users and the beneficiary then uses it to buy cooking gas at market price. The subsidy transfer this month is Rs198.18 per cylinder.