Dalit Bandhu scheme: Is financial aid taxable income?

Hyderabad: The Telangana State government has introduced the Dalit Bandhu initiative for the economic development of the Dalits. In the scheme, every eligible family will get Rs.10 lakhs as financial assistance.

The Dalit families are satisfied with the Rs.10 lakhs aid but they are liable to pay tax on it which has become a cause of concern for the beneficiaries.

Though the state government has approved Rs.10 lakhs to Dalits, the financial aid is not exempted under the Income-tax.

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Chief Minister K.Chandrashekhar Rao has started the Dalit Bandhu scheme from his adopted village of Vasalamarri in Alair assembly constituency. In this regard no directive has been issued by the government that this scheme is not exempted under the income tax.

Rs. 10 lakhs each has been deposited in the bank accounts of the 76 families of the village. If the beneficiaries do not file income tax returns, they can be issued notices.

According to the state officials, this scheme of transferring Rs.10 lakhs in accounts of beneficiaries is the first of its kind in the country. Normally, the central or state government benefit scheme does not exceed Rs.5 lakhs.

The state government can request the central government to exempt the Dalit Bandhu scheme from the Income Tax, the official said.

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