Salaries and emoluments paid by Asian Development Bank
Section 5 of the ADB Act, 1966 (Act No. 18 of 1966), which deals with "Conferment of status and certain immunities, exemptions and privileges on Bank and conferment of certain immunities, exemptions and privileges on its officers and employees" states that "Notwithstanding anything to the contrary contained in any other law, the provisions of the Agreement set out in the Schedule shall have the force of law in India". Article 56 of the Schedule states that "No tax shall be levied on or in respect of salaries and emoluments paid by the Bank to Directors, alternates, officers or employees of the Bank, including experts performing missions for the Bank".
From the above, it is clear that salaries and emoluments paid by the Asian Development Bank is exempt from tax in india like the provisions contained in the UN (Privileges and Immunities) Act, 1947.
The provisions of the said ADB Act, 1966 supersede the provisions of the Income Tax Act. Therefore, the income tax department should not treat the salaries as taxable income.
Kindly clarify. Many thanks in advance.