Plea in Madras High Court to exempt persons earning below Rs.8 L a year from income tax

Plea in Madras High Court to exempt persons earning below Rs.8 L a year from income tax

The petitioner maintains it violates the fundamental rights of the citizens

The Madurai bench of the Madras High Court has sought the response of the Central government on a plea challenging the fixation of Rs.2.5 lakh as the base income for the purpose of collecting income tax.

This is in light of the recent Supreme Court decision upholding the validity of the 103rd Constitutional Amendment providing reservation to the Economically Weaker Sections (EWS) of the society with a gross annual income below Rs.7,99,999.

The bench of Justice R Mahadevan and Justice Sathya Narayana Prasad sent a notice to the Ministry of Law & Justice and the Ministry of Personnel, Public Grievances and Pensions and adjourned the matter by four weeks.

The petitioner, Kunnur Seenivasan, an agriculturist, and member of the Asset Protection Council of the Dravid Munnetra Kazhagam party, approached the court to set aside the First Schedule, Part-I, paragraph-A of the Finance Act, 2022, fixing the rate of income tax.

(As per the schedule, any person whose total income does not exceed Rs.2,50,000 annually, is exempted from paying tax).

The petitioner challenged the schedule based on the recent apex court decision in the Janhit Abhiyan vs Union of India case, wherein, while upholding a 10 percent reservation for the EWS, the court confirmed that a family earning Rs.7,99,999 per annum, excluding assets, fell in the EWS category.

He stated that when the government classified a group as EWS for getting reservations by fixing a gross income, the same yardstick should be applied to other sections of people and income tax should not be collected from them. The schedule should be declared as ultra-vires and against Articles 14, 15, 16, 21 and 265 of the Constitution of India.

Seenivasan also remarked in his petition that the office memorandum issued by the Centre fixing Rs.8 lakh per annum as the criteria for economic reservation violated the fundamental rights of the citizens. The present schedule of the Income Tax Act was against the top court's judgment, as it led to the collection of tax from economically poor citizens, who are unable to compete with the forward community people economically or in status or education.