Tax exemption for those making less than Rs. 8 lakh: Madras High Court petition

by Mapping Returns
Tax exemption for those making less than Rs. 8 lakh: Madras High Court petition

The Madras High Court’s Madurai Bench has given the federal government notice in response to a plea asking for an exemption from income tax for those making less than Rs. 8 lakh yearly.

According to the petitioner, Kunnur Seenivasan (82) of Virudhunagar, a member of the DMK’s Assets Protection Council, Paragraph A in Part-I of First Schedule of the Finance Act, 2022, which established the aforementioned tax bracket, violates Articles 14, 15, 16, 21, and 265 of the Indian Constitution.

The income tax slabs under the present Finance Act, according to Seenivasan, are in conflict with the annual income cap for the EWS category. Families can apply for assistance under the Economically Weaker Section (EWS) category if their yearly gross income is up to 7,99,000.

“The government should not be allowed to collect income tax from individuals having income up to limit of 7,99,999 as there is no rationality and equality in it,” the petitioner said. “When the government fixed income criteria that a family having gross income up to the limit of 7,99,999 is an economically weaker family for availing benefits under Economically Weaker Section (EWS) reservation.”

This occurs just days after the Supreme Court affirmed a 10% reservation for the Economically Weaker Sections in admissions and government positions among the non-reserved categories. A majority of the Supreme Court’s constitution bench ruled that the quota is not discriminatory and does not change the constitution’s fundamental framework.

Former Chief Justice of India U U Lalit and Justice S Ravindra Bhat disagreed with Justices Dinesh Maheshwari, Bela M Trivedi, and J. B. Pardiwala’s conclusion that the amendment did not violate the Constitution’s fundamental principles.

The EWS quota was established by the 103rd constitutional amendment and approved by the Center in January 2019. Later, it was contested in front of the Supreme Court.

In the meantime, business group PHD Chamber of Commerce and Industry stated on Monday, ahead of the pre-Budget meeting, that the Union Budget 2023–24 needs to raise the tax refund advantages for consumer expenditures. To raise discretionary incomes and boost demand, the Confederation of Indian Industry (CII) has also suggested lowering personal income tax rates. It has also suggested lowering the 28% goods and services tax (GST) rate on a select group of consumer durables.

In an effort to shorten the time it takes for taxpayers to file ITRs, the Central Board of Direct Taxes published a draught common income tax return form earlier this month by combining all existing income tax returns—except ITR-7.

Depending on the type of person and nature of income, taxpayers are currently required to submit their income tax returns in ITR-1 to ITR-7. The time it takes to file the ITRs is increased by the taxpayer’s mandatory requirement to review every schedule, whether or not that particular schedule is applicable.

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