TAXING AGRICULTURE

An Economic Necessity

Group 11

Yudhir Agrawal

Akash Mittal

What is agricultural income?

• Income from agricultural operations on land

• Income from sale or processing of agricultural produce raised on agricultural land

• Income from rent of agricultural land

Statistics and Facts

• Agriculture provides employment to approx. 60% of Indian population

• Agriculture contributes approx. 20% of Indian GDP

• As per the Indian Constitution, Agricultural Tax is the purview of State Governments

Statistics and Facts

Statistics and Facts

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Target Population

• Adding those individuals into the tax net who evade taxes by falsely showing their income as agricultural income

• Adding more individuals to the tax net, who generate agricultural income and are worthy of contributing to the development of the country

The way to go…

• Instructing states for strict implementation of agriculture tax and giving incentives to the states doing so

• Redistributing tax collected from agriculture to the states in the same proportion

• Making necessary constitutional changes to implement the taxation if states fail to act earnestly

The way to go…

• Individuals can be included into the net by defining “Consumption Points” and maintaining accurate records of the same

• Tax slabs and rates should be same

• Generated revenue to be used only for agriculture infrastructure enhancement and increasing subsidies and crop insurance

Benefits

• To curb evasion of tax in the pretext of agricultural income and also curb conversion of black money into white

• Encourage environmentally friendly land use because of targeted tax incentives for conservation and land preservation activities and reduced tax benefits for harmful practices

Pitfalls

• The rural rich save most of their money in the form of gold. Until gold trading is fully regulated and considered as a consumption point, the rural rich will escape from the tax net

• Agricultural tax can be evaded under the pretext of a joint family system

THANK YOU