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Law

'If Rs 8 Lakh is EWS Cut-Off, How Come Those Earning Over Rs 2.5 Lakh to Pay Income Tax?': Petitioner

Kunnur Seenivasan, a Dravida Munnetra Kazhagham party member, has sought the removal of the First Schedule, Part I, paragraph A of the Finance Act, 2022.

New Delhi: How is it that Rs 2.5 lakh is the base annual income for collection of income tax when the Supreme Court has upheld the decision to earmark for inclusion in the Economically Weaker Section a gross annual income of below Rs 8 lakh?

This is a question central to a petition at the Madurai bench of the Madras high court. The court has sought the response of the Union government in it, LiveLaw has reported.

The Supreme Court on November 7 upheld the 103rd Constitution Amendment Act which granted 10% reservation to the economically weaker sections among the ‘upper’ castes in a 3:2 decision. There has been criticism of the judgment, with one of the two dissenting judges, Justice Ravindra Bhat, noting that the quota was “exclusionary” and absolutely did not recognise Scheduled Castes and Scheduled Tribes, or the Other Backward Classes.

The EWS quota considers income as a determining factor for inclusion in the ‘economically weaker’ section. However, as highlighted by the petition, a large section of those within the quota are well within the slab that needs to pay income tax.

Kunnur Seenivasan, an agriculturist and Dravida Munnetra Kazhagham party member, has sought the removal of the First Schedule, Part I, paragraph A of the Finance Act, 2022. This part fixes the rate of income tax and no one whose gross annual income is less than Rs 2,50,000 needs to pay tax, according to it.

This part now goes against Article 14, 15, 16, 21 and 265 of the constitution, the petitioner has said.

The Hindu reported that Seenivasan who is 82 years old and is serving as a member of the Assets Protection Council of Tamil Nadu’s ruling party has contended that the government collecting tax from an individual earning Rs 2.50 lakh annual income was a clear violation of fundamental rights.

A bench of Justice R. Mahadevan and Justice Sathya Narayana Prasad issued notice to the Union Ministries of Law and Justice, Finance Personnel, Public Grievance and Pension.

The matter will be heard again after four weeks.

According to Hindu, Seenivasan, in his petition, has said that because the government has fixed less than Rs 8 lakh as gross annual income for inclusion in the EWS reservation category, the income slab for income tax should also be increased.

“[T]he very same yardstick should be applied to all other sections of people,” Seenivasan’s petition has said.

He has also said that the government should not collect tax from an individual who earns up to Rs 7,99,999 annually and that collection in spite of the EWS category including such people has no ‘rationality and equality’.

“When the Government fixed income criteria that a family whose having cross income upto the limit of Rs.7,99,999/- as Economically Weaker Section family for availing benefit under Economically Weaker Section reservation, the respondents should not be permitted to collect Income tax from individual having income upto limit of Rs.7,99,999/-, because there is no rationality and equality in collecting the tax,” the petition says, according to LiveLaw.

Seenivasan’s plea also observes what a large section of critics have said on the EWS quota – while a section of people having income below Rs.7,99,999 per annum are eligible to get reservations under the section while others are not eligible to get reservation on the basis of income criteria. “Hence, it is clear violation of the fundamental rights,” the plea states.

An all legislative party meeting chaired by Tamil Nadu Chief Minister and DMK chief M.K. Stalin had earlier “rejected” the 103rd Constitutional Amendment providing 10% EWS quota, saying it created “caste-discrimination” among the poor.