New Delhi [India], Apr 27 : Dismissing the proposal put forth by a member of NITI Aayog, Minister of State for Finance Santosh Kumar Gangwar on Thursday stated that no taxes will be levied on agricultural income.
Reiterating the statement made by Union Finance Minister Arun Jaitley, Gangwar asserted that there was never any intimation of a tax to be imposed on profits recovered from agricultural activities.
"Like it was stated by the Finance Minister, we had no talks on imposing any form of taxes on agricultural income," he said.
Commenting on the position of Non Performing Assets (NPA), Gangwar said the issue is not as detrimental as being projected, adding that the matter will soon be resolved.
On Wednesday, Jaitley had stated that the Centre had no plans to impose any tax on agriculture income, while acknowledging that as per the Constitutional Allocation of Powers, the central government has no jurisdiction to impose tax on agricultural income.
"I have read the paragraph in the 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," he said.
However, NITI Aayog member Bibek Debroy made a strong case for taxing agriculture income, an opinion contrary to the government's stated position.
He also suggested that exemptions on personal income tax should be removed to increase tax base from the current about 37 million in the country of 1.3 billion of people.
In May 2016, the Prime Minister's Office (PMO) had advised the NITI Aayog to prepare documents on 15-Year Vision, Seven-Year Strategy and Three-Year Action Agenda.
All agricultural income is currently exempted from income tax, regardless of its size. While the provision is meant to protect farmers, non-agricultural entities sometimes use it to evade taxes by declaring agriculture as the source of their income.
In order to mitigate the generation of black money, the loopholes need to be plugged..