{"id":304950,"date":"2024-07-19T19:55:04","date_gmt":"2024-07-19T14:25:04","guid":{"rendered":"https:\/\/forumias.com\/blog\/?p=304950"},"modified":"2024-07-19T19:55:04","modified_gmt":"2024-07-19T14:25:04","slug":"the-issue-of-agri-tax-exemption","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/the-issue-of-agri-tax-exemption\/","title":{"rendered":"The issue of agri tax exemption"},"content":{"rendered":"<p><strong>Source: <\/strong>This post <strong>\u2018The issue of agri tax exemption\u2019<\/strong> is created based on the article<strong> Tax reforms: India\u2019s agricultural income exemption needs a rejig, <\/strong>published in <strong>Indian Express <\/strong>on <strong>19<sup>th<\/sup> July 2024.<\/strong><\/p>\n<p><strong>UPSC Syllabus Topic: <\/strong>GS Paper 3 \u2013 Agriculture \u2013 Agriculture sector reforms<\/p>\n<p><strong>News:<\/strong> Agricultural income is currently exempt from tax, which has become a conduit for tax evasion and money laundering, especially by non-agricultural entities.<\/p>\n<h2><strong>What is the rationale behind giving agriculture tax-exemption?<\/strong><\/h2>\n<p>First, the exemption is based on the constitutional provision that only states can legislate on agricultural income.<\/p>\n<p>Second, agriculture is a high-risk profession with small landholdings, making tax exemption justifiable for most farmers.<\/p>\n<h2><strong>What are the issues of giving tax-exemption to agriculture?<\/strong><\/h2>\n<p>Reports indicate that many non-agricultural entities and high-income individuals exploit this exemption. For instance, in a CAG audit of tax returns, many claims were allowed without proper verification, and substantial exemptions were given to corporate entities.<\/p>\n<p>While government has not provided the easy exemptions to other sectors, even after demands by the sections, agriculture is continuously getting the exemption.<\/p>\n<h2><strong>What can be done?<\/strong><\/h2>\n<p><strong>Long term measures: <\/strong>Implement a proper tax regime for agricultural income, with thresholds to protect small farmers while addressing large-scale abuses.<\/p>\n<p>Just like GST reforms, cooperative federalism can play a positive role in the agri sector reforms as well.<\/p>\n<p><strong>Immediate measures: <\/strong><\/p>\n<p>1) Restrict agricultural income tax exemptions for companies.<\/p>\n<p>2) Scrutinize high agricultural income claims (above \u20b910 lakh, \u20b950 lakh, and \u20b91 crore) to identify high-risk cases.<\/p>\n<p>3) Consider removing exemptions for agricultural income above certain thresholds (e.g., \u20b950 lakh or \u20b91 crore) to reduce inequity.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Source: This post \u2018The issue of agri tax exemption\u2019 is created based on the article Tax reforms: India\u2019s agricultural income exemption needs a rejig, published in Indian Express on 19th July 2024. UPSC Syllabus Topic: GS Paper 3 \u2013 Agriculture \u2013 Agriculture sector reforms News: Agricultural income is currently exempt from tax, which has become&hellip; <a class=\"more-link\" href=\"https:\/\/forumias.com\/blog\/the-issue-of-agri-tax-exemption\/\">Continue reading <span class=\"screen-reader-text\">The issue of agri tax exemption<\/span><\/a><\/p>\n","protected":false},"author":10320,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[1230,12002],"tags":[218,216,10500],"class_list":["post-304950","post","type-post","status-publish","format-standard","hentry","category-9-pm-daily-articles","category-agriculture","tag-agriculture","tag-gs-paper-3","tag-indian-express","entry"],"jetpack_featured_media_url":"","views":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/304950","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/10320"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=304950"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/304950\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=304950"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=304950"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=304950"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}