The Madurai bench of the Madras High Court on Tuesday issued a notice to the Centre on a plea seeking exemption from income tax for individuals who have an annual income of less than Rs 8 lakh, Bar and Bench reported.
The petitioner, Dravida Munnetra Kazhagam member Kunnur Seenivasan, argued that in light of the Supreme Court’s judgement to grant a 10% quota to persons from Economically Weaker Sections, a portion of the Finance Act, 2022 that requires individuals with an annual income of more than Rs 2.5 lakh to pay income tax, is “ultra vires” – an act done beyond one’s power.
In 2019, the Union government had introduced the Economically Weaker Sections quota for those who cannot avail of the reservations granted to Scheduled Castes, Scheduled Tribes and Other Backward Classes, but have an annual family income of less than Rs 8 lakh.
Persons from families that own more than five acres of agricultural land or 1,000 square feet of residential land are not eligible for the quota.
“If families earning less than Rs 8 lakh annually is EWS [Economically Weaker Sections], why should people earning more than Rs 2.50 lakhs pay income tax?” Seenivasan asked in his petition.
Seenivasan argued that when the government is classifying a particular group as an Economically Weaker Section based on a fixed gross income, the same yardstick should be applied during tax collection, reported Live Law.
“The present Income Tax Act schedule is against the Supreme Court judgement because it would lead to collecting of tax from the economically poor citizen and they could not compete with the forward community people in status or education or economic,” the petition said.
The court will hear the case after four weeks.
SC judgement on EWS quota
The petitioners before the Supreme Court had challenged the 103rd amendment that introduced changes to Articles 15 and 16 of the Constitution, which deal with the right to equality and provide the basis for reservations.
The majority verdict of the Supreme Court held that the allocation of the 10% quota fell within the powers vested with the legislature in the Constitution. On the other hand, the dissenting judges said that the quota cannot keep Scheduled Castes, Scheduled Tribes and Other Backward Classes out of its ambit as the Constitution does not allow exclusion.
The Dravida Munnetra Kazhagam had announced it will file a review petition against the verdict.