§ 2. Mr. Anthony Marlowe
asked the Under-Secretary of State for Commonwealth Relations what representations he has made to the Government of India with a view to restoring the immunity from Indian Income Tax which existed in respect of service retired pay prior to the India Independence Act; and whether he will make a statement.
§ The Under-Secretary of State for Commonwealth Relations (Mr. John Foster)
I assume that my hon. and learned Friend is referring to Indian Income Tax on pensions and not on pay. The decision of the Government of India to tax Indian pensions is within their legal competence and I know of no grounds on which my noble Friend can make representations against it. Special measures have, however, been taken by Her Majesty's Government in the United Kingdom to relieve from any additional net burden of tax those pensioners who, but for the transfer of power, would have enjoyed exemption from Indian tax under Section 272 of the Government of India Act, 1935.
§ Mr. Marlowe
Does my hon. and learned Friend mean that, in fact, he is not doing much about this rather difficult problem? Is he aware that many of these retired officers are suffering a financial loss and that they are looking towards Her Majesty's Government to remedy this injustice?
§ Mr. Foster
I do not think that the position is at all what my hon. and learned Friend says. For instance, pensioners in the United Kingdom have been promised relief out of United Kingdom funds against Indian Income Tax, and they do obtain it. Perhaps the best thing would be for me to send to my hon. and learned Friend the pamphlet which explains all this information. It is not a fact that they suffer any financial loss.
§ 3. Mr. Marlowe
asked the Under-Secretary of State for Commonwealth Relations what sum has been set aside from India's Sterling balances to secure 1629 payment in the United Kingdom of service retired pay payable by the Government of India to retired British officers living in this country; and whether he will ensure that the administration of retired pay in the United Kingdom is retained in his office and not transferred to the High Commissioner for India.
§ Mr. J. Foster
Financial provisions covering the civil and military sterling pensionary liabilities of the Government of India were made in an exchange of letters between the then Chancellor of the Exchequer and the Indian Finance Minister in July, 1948, published at the time as items 5, 6, 7, and 8 of Cmd. 7472. No final decision has been reached about the future administration of pensions of Indian Army Officers living in the United Kingdom. In the meantime, the Commonwealth Relations Office continues to do this work.
§ Mr. Marlowe
Will my hon. and learned Friend do all in his power to safeguard those affected? Is he aware that although he says they are not suffering any injustice, those who seem to know most about it, those who are affected, are feeling a very strong sense of injustice, and perhaps they are more conscious of it than is my hon. and learned Friend?
§ Mr. Foster
If my hon. and learned Friend is still referring to Question No. 2, about Income Tax, I assure him that the position is that the United Kingdom have explained to these pensioners how they can get the relief for their loss, caused by reason of the Indian Government's added Income Tax on pensions. As I understand it, the situation is perfectly in order.
§ Colonel Alan Gomme-Duncan
Is my hon. and learned Friend aware that there is an element of hardship in many cases, with reference not to Income Tax but to the non-receipt of full entitlement of pension? Can he do something to speed up the action of the Indian Government in this matter?
§ Mr. Foster
If my hon. and gallant Friend will send me details of any cases I shall be very pleased to look into them and expedite them.