Union Minister of State for Finance, Pankaj Chaudhary told Parliament on December 20, 2022 that income taken into account for economically weaker section (EWS) categorisation and the basic exemption level under the Income-tax Act, 1961 are two distinct things.
He said this in a written reply to Rajya Sabha during the ongoing Winter Session of Parliament .
Why Total Limit From EWS Is Not Relevant For An Individual
Chaudhary explained that the government has fixed the annual income limit for a general category family at Rs 8 lakh from all sources for availing the benefit of reservation under the EWS category.
“This limit of Rs. 8 lakh for qualifying into the EWS category is a gross income limit, which includes the income from all sources of all family members as opposed to the basic exemption limit under the Income-tax Act, 1961, which is applicable to the income of a single individual,” he says.
“Further, it may also be noted that gross family income from all sources may also include certain income, which is exempt under the provisions of the Income-tax Act, 1961, for example, agricultural income,” the minister adds.
The Finance Act, 2019 revised Section 87A of the Income-tax Act, 1961 to offer persons with total incomes up to Rs 5 lakh a 100 per cent tax relief.
“Hence, under the existing provisions of the Income-tax Act, 1961, an individual having total income up to Rs 5 lakh is not required to pay any income tax,” says Chaudhary.
Also, in case you have earned an income below the basic exemption limit (Rs 2.5 lakh per annum), and have, therefore, not filed a nil ITR in July this year, you may consider filing a belated ITR by December 31, 2022, if you require some additional benefits.
These include scholarships, visas and loan applications, among others. Educational institutes typically demand an ITR as proof of income for awarding scholarships. In case of visas, even a track record of nil ITR will help the applicant during the application of a visa for a job or a scholarship abroad later. ITR will also help one to have better access to loans from lending institutions. Read here for details: https://www.outlookindia.com/business/benefits-you-will-get-on-filing-a-nil-income-tax-return-news-238490
