HAS AGRICULTURAL INCOME BECOME A TOOL FOR MONEY LAUNDERING IN INDIA ?
Agricultural income earned by a
taxpayer in India is exempt under Section 10(1) of the Income Tax Act,1961.
What is more shocking and surprising is that this so called agricultural income
is tax free without any limit. You can have unlimited amount of agricultural
income without paying even a single rupee towards income tax.
While income tax is levied on all types of incomes
from all the persons, why Government is not imposing any income tax on
agricultural income, is a million dollar question. Some people are under the
wrong impression that our Government is very considerate and sympathetic towards
the farmers community and do not want to impose income tax on agricultural
income of farmers. However, this is completely untrue. Had it been the
intention of the Government to provide the relief to farmers by not subjecting
them to income tax, it could have been done by fixing a threshold for tax free
agricultural income. If some type of income is made completely tax free without
any limit, it clearly means that the farmers are not the real beneficiaries of
this tax exemption and there is a larger conspiracy for providing this
exemption of unlimited amount, by making a provision for the same in the Income
Tax Act.
You will be surprised to note that no political
party, irrespective of its ideology, never wants to bring the agricultural
income into the tax net. You must have witnessed that when Bills relating to
increase of salaries and allowances are introduced in the parliament or
assemblies, these bills are instantly passed unanimously, with all political
parties happily supporting the same. This very same principle applies to total
tax exemption of Agricultural Income. Since all the politicians (irrespective
of their political ideology) are the real beneficiaries of this unlimited tax
exemption, they are happily enjoying it. Agricultural Income is being used as a
tool to convert black money into white money for the last 75 years. Most of the
politicians and the persons patronised by these politicians are misusing the
“Agricultural Income” route for conversion of their black money into white
money.
Income Tax Department and the officers sitting in
the income tax department are fully aware of this misuse of tax exemption on
agricultural income but they prefer to remain silent on this “Tax Anarchy”, due
to political reasons. If some honest officer tries to scrutinize the tax
exemption on agricultural income, then entire political system begins to harass
him and the officer concerned is persecuted, suspended and even dismissed from
the service.
Few years back Central Government has compulsorily
retired 27 senior officers from various Government Departments including Income
Tax, Customs & Excise Departments. Out of these 27 officers, one senior
officer was investigating the agricultural income tax exemption misuse by a
former finance minister in the previous Government. There are several detailed
videos of this officer available on the social media, wherein the officer is
explaining how the former finance minister of the previous Government was
misusing the agricultural income tax exemption to convert his black money into
white money. Since the officer concerned has now been sacked, it can be safely
presumed that the investigation being carried out by that officer has also died
its natural death.
Before presentation of the Union Budget every year,
Government invites suggestions from all stakeholders to give their suggestions
for the Budget to increase the overall tax revenue. For the last 20 years, I am
giving this suggestion to Government every year that Agricultural Income should
be brought into tax net. If the intention of the Government is to provide tax
relief to farmers, then that can be provided by prescribing a threshold
exemption limit for the agricultural income. But why any Government will accept
any such suggestions, when their own interests are at stake.
How long our Government will continue to provide
this tool for Money Laundering, is a question, which is being asked by other
taxpayers as the burden of this this blanket tax exemption is being shared by
tax paying citizens of the country.
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