New Delhi: Government think-tank NITI Aayog has made a case for bringing in non-farm entities that camouflage their blackmoney as agriculture income to evade taxes under the tax net.
This was one of the suggestions which was made in draft three-year Action Agenda circulated among the chief ministers at the third meeting of the Governing Council chaired by Prime Minister Narendra Modi on Sunday.
"The Action Agenda prepared by NITI Aayog guiding central and state governments for next three years has a section on tax reforms. One of the suggestions was to review of tax exemptions, especially farm, as it is often misused to convert blackmoney into legitimate income," a source said.
The source said that the agenda specifically talked about plugging loopholes in the taxation system to check tax evasion. The Aayog, the source said, has suggested steps should be taken to bring all non-farm entities which seek tax exemptions showing agriculture income in their returns under the tax net.
In another words, the Aayog brought this fact to the notice of the centre as well as states that blanket tax exemption of farm income is being used as a tool by non-farm entities to evade tax on income which otherwise it taxable.
However, the Aayog as well as the finance ministry has clarified that the government has no plans to tax farm income after a controversy which erupted yesterday following a remark by NITI Aayog member Bibek Debroy.
During a press conference on Action Agenda yesterday, Debroy had said: "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."
However, while explaining about his view on taxing farm income, Debroy did not specify that he was talking about of bringing farm income under tax scrutiny in view of misuse of the exemption on farm income by non-farm entities.
