Dismissing the suggestion of NITI Aayog member Bibek Debroy, the Finance Minister Arun Jaitley has said that the government does not plan to impose any tax on agricultural income. He clarified that according to the constitutional allocation of powers, the central government has no jurisdiction to impose tax on agricultural income.
Jaitley said, ‘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.’
The NITI Aayog member Bibek Debroy had said that taxes should be imposed on agricultural income above a certain threshold in order to expand the tax base. He also added that 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.
Meanwhile, the NITI Aayog has said that Debroy’s suggestion 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. NITI Aayog noted that the views on taxing farm income expressed by Member Bibek Debroy were personal and not those of the Aayog.
