Accounting Training

Blog

Blog Archive


2017

Income Tax dept issues notices to farmers claiming suspect agricultural income

  • The Income-Tax department has issued notices to tax assessees who have shown unusually high income from agricultural activities.
  • Notices have been sent to around 700 individuals who have shown more than Rs 20 lakh as farm income. In all these cases, the farm income turns out to be higher than their main source of income, and the department suspects the veracity of the claim.
  • In Mumbai alone, the I-T has sent notices to around 100 people. In quite a few cases, the so-called farm income is twice the income from the main source of income they have been reporting in the past.
  • “Some of the recipients even don’t have the large land parcel to justify the quantum of agricultural income they have declared,” a senior I-T official said, adding that the farm income is actually money earned from other sources.
  • Agriculture income in the country is exempt from tax, and so the I-T feels that income is being misreported to evade tax.
  • “Neither the government nor income tax is targeting farmers, but anybody who is evading tax on the name of agriculture income will be dealt with strictly,” the official said.
  • Last year, Firstpost columnist RN Bhaskar had written about how the number of people who filed income tax returns declaring agricultural income swelled from 2.46 lakh assessees in 2009 to 4.25 lakh in 2010 to 6.56 lakh in 2011 and then to 8.12 lakh people in 2012.

Excerpt from the article:

  • “The total income declared by them (8.12 lakh assessees in 2011 and 2012 was a stupefying Rs 874 lakh crore. That represents over 125 years of total taxes garnered by the government in any given year. The average income declared by each assessee during those years was an equally unbelievable Rs 30 crore and Rs 80 crore respectively. Obviously, even if you take the most fertile land with the most expensive crop, average incomes of Rs 80 crore are not easy to come by.
Financial Management