No proposal to tax agricultural income, says government

The government has no plans to waive off the debt of farmers of Punjab.

There is no proposal to tax the agricultural income in India, the Ministry of Finance has said while responding to a question raised in the Parliament on February 13.

Minister of State for Finance Pankaj Chaudhary has further added that no committee to study this issue has been formed in the last five years.

Article 246 of the Constitution of India puts the tax on agricultural income under the State List.

The issue was raised in the Parliament after the chairman of the Economic Advisory Council to the Prime Minister, Bibek Debroy, in an Op-Ed on January 21 argued that it is wrong for Indian governments to not tax agricultural income.

Debroy in the piece had listed out several government-appointed committees that recommended taxing agricultural income including — Report of the Taxation Enquiry Commission (1953–54), Raj Committee on Taxation of Agricultural Wealth and Income (1972), Fourth Five-Year Plan (1969–74), Report of Fifth Finance Commission (1969), Tax Reforms Committee (1991), Kelkar Task Force on Direct Taxes (2002), White Paper on Black Money (2012) and Tax Administration Reform Commission (2014) – to make his point.

Meanwhile, responding to another question in the parliament, the government has denied having any proposals to waive off the debt of farmers of Punjab taken from banks and money lenders.