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If the poor earn Rs 8 lakh a year, then why tax on earning Rs 2.50 lakh? know about the government

Income Tax Rules: For the general or OBC category to take advantage of reservation in central government jobs, the government has fixed an annual income limit of Rs 8 lakh, which is also known as the creamy layer. In OBC or General category, the family whose annual income is less than Rs 8 lakh per year, only they get the benefit of reservation. The government considers such people as poor. Now the question is arising that why people earning a little more than Rs 2.50 lakh are paying income tax? The echo of this thing has been heard in the Parliament.

Poor earning 8 lakhs, then why tax on 2.50 lakhs?

A question has been asked to the government in Parliament regarding this discrimination. Rajya Sabha MP P Bhattacharya questioned the Finance Minister about this, when the government considers those earning Rs 8 lakh as poor, then how can those earning Rs 2.50 lakh be asked to pay tax?

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The annual income of the family is Rs 8 lakh.

Answering this question, Minister of State for Finance Pankaj Chowdhary said that the government has fixed the annual income of the family at Rs 8 lakh for the economically weaker sections (EWS) of the general category to take advantage of the reservation. This limit of Rs 8 lakh is made by including the annual income of all the family members from all sources. Whereas under the Income Tax Act, the basic income tax exemption limit of Rs 2.50 lakh is applicable on the income of a single person. He said that income from agriculture is also included in the total income of the families of economically weaker sections (EWS). Whereas in the Income Tax Act, tax exemption is available on agricultural income.

No tax on income up to Rs 5 lakh

The Minister of State for Finance said that in the Finance Act 2019, under section 87A of the Income Tax Act, 100% tax exemption has been given to those earning up to Rs 5 lakh. That is, those with an annual income of up to Rs 5 lakh do not have to pay any tax. The Minister of State for Finance said that those whose income is more than Rs 5 lakh can take advantage of the incentives and deductions available under the Income Tax Act, so that they can reduce the tax burden on themselves.

Those earning Rs 8 lakh get many exemptions

Pankaj Chowdhary said that a person earning up to Rs 8 lakh annually can reduce his tax burden by taking various exemptions under the Income Tax Act. He said that it is clear from this that it is not fair to compare the limit of income tax exemption on income and the income limit fixed for determining economically weak people because the method of determining both is completely different.

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