Tax evasion cannot be done by showing it as ‘agricultural income’. The central government adopted a tougher surveillance policy. Parliament’s Public Accounts Committee Tax Highlights loopholes in policy. After that, the decision to be strict is of the center.
The income tax authorities will keep a close watch on the super-rich farmers from now on. Under the law, ‘tax-free’ – in cases where the income exceeds Rs 10 lakh per annum, extra caution will be exercised. This was stated by the Union Ministry of Finance. The committee said that in about 22.5% of cases, without proper assessment and document verification Tax– Approved to claim free income.
This is stated in the report titled ‘Assessment of Agricultural Income’ by the panel on Tuesday. This is based on the report of the Auditor General of India and the Comptroller General. How super-rich farmers Tax Cheating? A simple example of this is given in the report. An agriculturist from Chhattisgarh has been mentioned. The farmer sold his agricultural land and got a huge amount of Tk 1.09 crore. But he demanded tax exemption by showing it under agricultural income.
The parliamentary panel identified the error and said that the income tax authorities did not verify any ‘documents’ supporting the tax exemption in the ‘assessment record’.
Under Section 10 (1) of the Income Tax Act, 1971, agricultural income tax is not applicable. Revenue or transfer of agricultural land and income from agriculture is considered as ‘agricultural income’ under the law.
To address this, the Ministry of Finance has set up its own mechanism to verify direct tax-free appeals. If the agricultural income is more than 10 lakh rupees, then additional verification policy will be adopted.
Politicians are afraid to mention taxes on agriculture. It is true that most farmers are poor. They should be given a discount. But there is no reason not to pay taxes to big farmers, ”said Nabal Kishore Sharma, a former income tax official.
If the very rich farmers pay taxes, how much will the country gain? That information has come up in the report of a planning commission. If the country’s top 0.04% of large farming families and the top 30% of firms pay income tax, then up to Rs 50,000 crore can be collected annually.