New Delhi: Rebuking Niti Aayog, Union finance minister Arun Jaitley on Wednesday said that the government has no plan to introduce tax on agricultural income.
Mr Jaitley’s statement came after media reports that Niti Aayog on Tuesday had made a strong case for taxing agriculture income by bringing it within personal income tax.
“I have read the paragraph in Niti Ayog Report entitled ‘Income-Tax on agriculture income’. To obviate any confusion on the subject, I categorically state that the Central government has no plan to impose any tax on agriculture income,” said Mr Jaitley.
Finance minister said that as per the Constitutional allocation of powers, the Central government has no jurisdiction to impose tax on agricultural income.
Later in the day, Niti Aayog also washed off its hand on the issue of taxing agri income in the country calling it a personal view of one member Bibek Debroy.
“Several newspaper reports published on April 26th, 2017, state that Niti Aayog or its draft three-year action agenda has recommended that farm income in India be taxed to expand the existing Income-Tax base. The Niti Aayog categorically states that this is neither the view of the Aayog nor is such a recommendation made anywhere in the Draft Action Agenda document as circulated to the Governing Council at the meeting on 23rd April 2017,” said the think tank in a statement.
Niti Aayog notes that the views on taxing farm income expressed by member Bibek Debroy were personal and not those of the Aayog, it added.
“On expanding the base on the personal income tax side, other than elimination of exemptions, is to also tax rural sector, including agriculture income above certain threshold,” Mr Debroy had said .
The non-farm income in rural area is already taxed.
Mr Debroy had said that income tax should apply on agriculture income only above a threshold, which could be more or less at par with the personal income tax exemption limit, which at present is '2.5 lakh, as per reports.
Bringing agricultural income in personal income tax is politically controversial issue as farmers are a big vote bank in the country and agonizing them will have political fall out which no party in governance wants to risk.
