§ COLONEL SYKESasked Mr. Chancellor of the Exchequer, Whether under the 104th section of the Income Tax Act, (5 and 6 Vic. c. 35,) it is either legal or just to charge Income Tax upon permanent deductions made from the retired pay or furlough allowance of Indian Officers for Military Fund or Widows and Orphan Funds, as is at present done by the Bank of England and the India Office, instead of charging Income Tax upon their net pay?
§ THE CHANCELLOR OF THE EXCHEQUER, in reply, said, he believed it was legal to deduct income tax from the gross pay of officers retired or on furlough, without making allowance for permanent deduction on account of Military Fund or Widows and Orphan Funds. Whether it was just was another question. The Orphan Fund was entirely for the benefit of the orphans, and the subscribers did not in any way participate in it; and it was questionable whether income tax should be charged on the deduction. In the case of the Military Fund the subscribers benefited; but the cases were sufficiently analogous to make them both proper subjects for consideration.