Most of new poor' fall under 20 per cent income-tax slab
Income tax specialist Asish Kasad said, “The bar on income tax cannot change until and unless the government makes changes.â€
Hyderabad: The government proposes to include those earning below Rs 8 lakh annually under economically backward classes, but people with such earnings fall in the 20 per cent tax bracket. The 20 per cent income-tax bracket exists for those earning from Rs 5 lakh to Rs 10 lakh per annum.
Income tax specialist Asish Kasad said, “The bar on income tax cannot change until and unless the government makes changes.”
Mr Majid Sheikh, an income-tax practitioner, said, “The quota for economically backward classes does not in any way change the income tax that one has to pay. Those who earn Rs 2.50 lakh per annum also have to pay 5 per cent tax.”
The proposed economically backward classes status has created uproar, as the number of people who will qualify in this segment will be really high. According to the Nabard All India Financial Inclusion Survey 2016-17, there are 98 per cent households in rural and semi-urban areas that qualify for the 10 per cent quota benefits.