New Delhi, April 26: Several news reports published stating 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. Finance Minister Arun Jaitley has clarified that central Government has no plan to impose any tax on agriculture income.
"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. As per the Constitutional Allocation of Powers, the Central Government has no jurisdiction to impose tax on agricultural income.”, Finance Minister Arun Jaitely has clearly stated.
Farm Income in India be taxed to expand the existing Income Tax base 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.
The misunderstanding started from Niti Ayog member Bibek Debroy’s statement, “On expanding the base on the personal income tax side, other than the elimination of exemptions, is to also tax rural sector, including agriculture income above the certain threshold.” NITI Aayog has clarified that the views on Taxing Farm Income expressed by Member Debroy were personal and not those of the Aayog.