VIJAYAWADA: CUROIUSLY, agriculture now doesn’t just let farmers make ends meet, but has turned out to be boon for the black money hoarders as well. Thanks to the demonetisation of higher denomination notes, a large number of people are now trying to pass off their unaccounted cash as agriculture income which is not taxable.
Hours after the Centre announced the move, black money hoarders made a beeline for their auditors to manipulate their taxation records by increasing their agricultural income as against their non-agricultural income. For tax payers, the maximum non-taxable income is `2.5 lakh, but there is a relaxation for farmers under the Income Tax Act.
In Krishna, Guntur and the twin Godavari districts, which together are known as the rice bowl of Andhra Pradesh, a large number of rich people have farm lands but are diversified into other businesses. The exemption afforded to agricultural income has apparently become a blessing for politicians in Andhra Pradesh, a majority of whom hold agricultural lands.
“As per the IT Act, agricultural income, including the lease of lands, is exempted from tax net. However, we keep a cap on agricultural income and an exaggerated income is bound to cause suspicion among the IT authorities. Our clients are now asking us to find ways to increase the cap on agricultural income and amend the records accordingly,” a chartered accountant based in Hyderabad with clients who have lands in Krishna and Guntur districts said.
Interestingly, demonetisation has also become a boon for small and marginal farmers who have been facing severe losses due to either drought or heavy rains for the past few years. Anjaneya Reddy (name changed) who leased 3 acres in Nellore for cultivation, invested `3 lakh, but lost the entire crop to rains. To his surprise, his financier called him up and offered to waive the entire debt.
“Instead, he wanted me to deposit his 11.5 lakh in my bank account and show it as farm income. It was only yesterday that I learnt that farm income has some benefits,” Anjaneya Reddy said wryly.
Many farmers who are caught in debts are being offered such help by politicians, businessmen and financiers known to them, in return for favours.
Black money holders are also approaching SHG women who are in need of money, with offers of interest-free loans to clear their debts. However, a few financiers are asking for the mortgage of property or guarantee from farmers or women where the fresh loan obtained from the black money holders will be returned within a year.
This method is said to be popular in Srikakulam, Vizianagaram, Nellore, Anantapur, and Godavari districts.