The Centre on Wednesday categorically ruled out imposition of tax on agricultural income after NITI Aayog member Bibek Debroy kicked up a storm by suggesting that farm income should be brought under the tax net. As per the constitutional allocation of powers, the Central Government has no jurisdiction to impose tax on agricultural income, said Finance Minister Arun Jaitley, who is currently on an official visit to Moscow.
“I categorically state that the Centre has no plan to impose any tax on agriculture income,” he said in a statement. NITI Aayog, the Government’s premier think-tank, too issued a press statement, distancing itself from Debroy’s statement, saying the views expressed by him were ‘personal’. “The NITI Aayog categorically states that this 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 April 23, 2017”.
Debroy, a noted economist, had on Tuesday said taxes should be imposed on farm income above a certain threshold to expand the tax base. “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,” Debroy had said.