New Delhi: Between the economic inequality in the country, the debate has started once again regarding income tax payment and the scale of poverty. Questions are being raised that a person earning up to Rs.8 lakh per annum in India will be classified as poor, then is it justified to collect income tax from a person earning Rs.2.5 lakh per annum? The answer given by the government on such a question is more interesting than the question itself.
Income tax payment and economic poverty no comparison
During the winter session of Parliament, Rajya Sabha member P Bhattacharya on Tuesday raised questions related to income tax payments to the government. In his written question, he asked the government how fair it is to ask a person earning Rs 2.5 lakh a year to pay income tax in the country and a person and family earning up to Rs 8 lakh a year should be considered poor (economically). Weaker Sections (EWS) are considered.
On the question of MP P Bhattacharya, Union Minister of State for Finance Pankaj Chowdhary said that under the Income Tax Act, the basic exemption limit for tax payment has been fixed and there is a separate limit for economically poor families. He said that there can be no comparison between the extent of income tax payment and the extent of economic poverty.
It is necessary to file ITR for those earning 2.5 lakhs annually.
In his reply, Union Minister of State for Finance Pankaj Chowdhary said that the basic exemption provided under the Income Tax Act and the extent of classification in the income of the EWS group cannot be compared, as both are calculated differently for different purposes. is done in a manner. He said that under the Income Tax Act, a person is required to file ITR if his annual income is more than Rs 2.5 lakh. There are many benefits of filing ITR as well.
EWS Vs Income Tax Limit
Minister of State for Finance Pankaj Chowdhary said there is a difference between the income considered for EWS classification and the basic exemption limit under the Income Tax Act. For the Economically Weaker Section (EWS) group of the general category, the annual income limit of the family from all sources has been fixed by the government at Rs 8 lakh. This limit of Rs 8 lakh is a gross income limit, which includes income from all sources of all family members, to qualify in the EWS category.
Whereas, the basic exemption limit under the Income Tax Act applies to the income of an individual. He said that it may also be noted that the gross family income from all sources may also include certain income which is exempt under the provisions of the Income Tax Act. Income from agriculture is included in such a category.
No tax on income up to Rs 5 lakh
Union Minister Pankaj Chowdhary said that the Finance Act, 2019 has amended Section 87A of the Income Tax Act to provide 100 percent tax exemption to individuals having a total income of up to Rs 5 lakh. He said that therefore under the existing provisions of the Income Tax Act, a person having a total income up to Rs 5 lakh is not required to pay any income tax.
