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
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