EWS criteria: Petition seeks tax exemption for persons earning below Rs 8 lakh

A functionary of ruling Dravida Munnetra Kazhagam (DMK) has moved a plea before the Madras High Court’s Madurai Bench seeking an income tax exemption for persons earning less than Rs 8 lakh annual income, citing the Economically Weaker Section (EWS) criteria for reservation eligibility.

Earlier this month, a Constitution Bench of the Supreme Court, in a 3:2 majority decision, upheld the validity of the 103rd Constitutional Amendment which provides 10% reservation in government jobs and educational institutions to the ‘economically weaker sections of the society but excludes the ‘poorest of poor’ among Scheduled Castes (SC), Scheduled Tribes (ST), Socially and Educationally Backward Classes (SEBC) and Other Backward Classes (OBC) from its scope.

The exclusion of SC/ST/SEBC/OBC had left only the “middle class” among the forward castes drawing less than ₹8 lakh as annual family income to reap the benefits of the EWS quota.

DMK has already planned to move against the Supreme Court ruling that upheld the new reservation policy.

The petition filed by A Kunnur Seenivasan said that a part of the Finance Act, 2022, that requires individuals with an annual income of more than ₹2.5 lakh to pay income tax, is “ultra vires”, in light of the Supreme Court ruling that categorises families with a gross annual income of less than Rs 8 lakh as EWS, Indian Express reported.

A bench of Justices R Mahadevan and J Sathya Narayana Prasad issued a notice to the Union Government and the Law and Finance ministries, seeking a response within four weeks.

“When the government fixed income criteria that a family having gross income up to the limit of Rs 7,99,999 is an economically weaker family for availing benefits under Economically Weaker Section (EWS) reservation, the government should not be permitted to collect income tax from individuals having income upto limit of Rs 7,99,999 as there is no rationality and equality in it,” the plea was quoted by Live Law.