Individual Earning ₹2.5 Lakh Annually Asked To Pay Income Tax But Family…

Income Tax Rules: For the general category or OBC to avail the reserve in central government jobs, the government has set an annual income cap of Rs 8 lakh, which is also known as the creamy layer. In the OBC or General category, the family whose annual income is less than Rs 8 lakh per year, only they get the benefit of the reservation. The government considers such people as poor. Now the question arises as to why people who earn a little more than Rs 2.50 lakh pay income tax. The echo of this has been heard in Parliament.

Poor earning 8 lakhs, so why tax 2.50 lakhs?

A question has been put to the government in Parliament regarding this discrimination. Rajya Sabha MP P Bhattacharya questioned the Finance Minister about this, when the government considers those who earn Rs 8 lakh to be poor, so how can those who earn Rs 2.50 lakh be asked to pay tax?

The annual income of the family is Rs 8 lakh.

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Responding to this question, Minister of State for Finance Pankaj Chowdhary said that the government has set the annual family income at Rs 8 lakh for the economically weaker sections (EWS) of the general category to take advantage of the reserve. This limit of Rs 8 lakh is realized by including the annual income of all family members from all sources. Whereas, as per the Income Tax Law, the basic income tax exemption limit of Rs 2.50 lakh applies to the income of a single person. He said that income from agriculture is also included in the total income of families from the economically weaker sections (EWS). While in the Income Tax Law, tax exemption is available for agricultural income.

No income tax up to Rs 5 lakh

The Minister of State for Finance said that in the Finance Act 2019, under section 87A of the Income Tax Act, a 100% tax exemption was granted to those earning up to Rs 5 lakh. That is, those with an annual income of up to Rs 5 lakh do not have to pay any tax. The Minister of State for Finance said that those whose income exceeds Rs 5 lakhs can take advantage of the incentives and deductions available under the Income Tax Act, so that they can reduce the tax burden on themselves.

Those who earn Rs 8 lakh get many exemptions

Pankaj Chowdhary said that a person earning up to Rs 8 lakhs a year can reduce his tax burden by taking various exemptions under the Income Tax Act. He said that it follows that it is not fair to compare the income tax exemption limit on income and the income limit set to determine economically weak people because the determination method of both is completely different.

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