Govt clarifies basic Income Tax exemption limit for individual & threshold income limit for categorisation in EWS group not comparable

New Delhi, December 20

The Government clarified today that the basic Income Tax exemption limit for an individual and the threshold income limit for categorisation in the Economically Weaker Section (EWS) group are not comparable. It added that these two are computed in different manners for different purposes.

Minister of State for Finance Pankaj Chaudhary said this while giving a written reply in Rajya Sabha whether it is appropriate that an individual earning 2.5 lakh rupees annually be asked to pay income tax, in view of a government notification that a person or family earning eight lakh rupees annually is considered to be poor.

The Minister further clarified that the annual income limit of the family from all sources for the EWS group of general category for availing the benefit of reservation has been fixed at eight lakh rupees.

This limit of eight lakh rupees for qualifying into the EWS category is a gross income limit that includes the income from all sources of all family members as opposed to the basic exemption limit under the Income-tax Act which is applicable to the income of a single individual.

The Minister added that gross family income from all sources may also include certain income like agriculture income which is exempt under the provisions of the Income-tax Act.