NEW DELHI: Finance Minister Arun Jaitley on Wednesday clarified that the government has no plans to impose an income tax on agriculture.
“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,” Jaitley said in a statement on Wednesday.
His response comes in the wake of media reports saying the Niti Aayog had suggested that agriculture income be taxed. The finance ministry’s response is critical as the government is trying to attract investments in agriculture.
Prime Minister Narendra Modi had recently called for doubling agriculture income and any suggestion to tax the same goes against the stated policy of the government.
On Tuesday Niti Aayog member Bibek Debroy had said that farmers should pay taxes. “Besides removing tax exemptions, rural income including agriculture income could be taxed.”
“It is not a healthy statement apart from being a wrong statement. Such confusions could deter people from investing in agriculture,” says agriculture economist Vijay Sardana.
According to him, such statements create confusion in minds of private sector, planning to invest in agriculture or agri-related infrastructure.
Sardana pointed out that “those misrepresenting their income as agriculture should be taken to task not the sector.”
Meanwhile, the Niti Aayog, too, distanced itself from Debroy’s view saying the latter spoke in his personal capacity. It clarified that there is no proposal to tax the agricultural income in the Three Years Action Plan circulated to the chief ministers.