The government may do not forget taxing agricultural income, starting with an offer to target farmers with non-agricultural income above a positive threshold. This changed into one of the unique suggestions made via tax officials to Prime Minister Narendra Modi at a two-day convention of tax directors, Rajasva Gyan Sangam, last month. It’s been pitched as a low-hanging fruit that could probably bolster ongoing efforts to widen the united states of america’s taxpayer base.
“Tax officers made a specific suggestion that the government need to recollect taxing agricultural profits, now not completely but partly. It became stated that people having a regular income alongside agricultural income above a certain threshold may be delivered below the tax internet,” a government reputable stated. The notion was made within the course of the Prime Minister’s consultation at the event.
There are about 25 crore taxpaying families in India, of which 15 crore families are specified as agriculturalists and the remaining 10 crores are non-agriculturalists, consistent with estimates produced with the aid of Minister of State for Finance Jayant Sinha at a briefing after the PM’s session on the Rajasva Gyan Sangam.
At present, agricultural income is used for dedication of the tax rate at the same time as computing tax legal responsibility for a person if the net agricultural profits exceeds Rs 5,000 and total income, aside from internet agricultural income, exceeds Rs 2.five lakh in a 12 months. The tax on agricultural income is, but, later deducted from the total tax to be paid by means of the man or woman as agricultural income is exempt from tax. Any decision to tax agricultural income by using the Centre would require a change to the Charter.
The Principal Board of Direct Taxes (CBDT) has been searching carefully at agricultural profits claims of over Rs 1 crore by assessees of their tax returns in view of a PIL filed within the Patna Excessive Courtroom, which had raised concerns about agricultural profits getting used as the course for unaccounted cash. Over 2,three hundred cases showing agriculture profits of over Rs 1 crore had been detected by way of the profits Tax Branch inside the ultimate nine evaluation years.
In the other suggestions to the Prime Minister on the conference, tax officials expressed concerns concerning levy of cesses and surcharges by using the Centre, which despite the fact that are proposed to be advert-hoc in nature initially, but become being permanent.
“The tax officers cautioned that levy of cesses and surcharges ought to be transient. It was advised that taxpayers as well as states, which do now not get any percentage of cesses and surcharges from the Centre are complaining approximately the numerous cesses, so they should be levied best for a defined time frame. Otherwise, the tax price, in effect, becomes a lot higher than the maximum price of 30 per cent and that doesn’t replicate properly on the united states’s taxation machine,” another authorities’ official said.
Tax officials had also advised to offer a few incentive to taxpayers to record their tax go back, with one of the examples of incentives being an insurance cover. For first-time taxpayers, incentive of accidental insurance could be given through the government, even as for regular taxpayers, a life coverage cowl may be supplied as an incentive to document their returns regularly.
A vacation of around a yr from scrutinising and verifying I-T returns became advised by using a few tax officials to be able to spend greater time mastering the details of a number of e-initiatives being applied by means of the tax Department.
Hints have been additionally made concerning development in infrastructure of office spaces along with request by way of the tax officials to the PM to encompass an enchantment to fellow citizens to pay their taxes in reality in his Independence Day speech this 12 months.
Top Minister Modi, addressing the inaugural consultation of the convention, requested tax officials to construct a “bridge of trust” with assessees to achieve collection goals without coercion. He asked officials to increase the taxpayer base appreciably, by way of leveraging contraptions inclusive of the authorities’s ‘Provide it Up’ initiative for purchasers to voluntarily surrender LPG subsidy. This changed into the primary time that the two sales forums, the Important Board of Direct Taxes (CBDT) and the Significant Board of Excise and Customs (CBEC), held a simultaneous convention.