PAC asks govt to categorise higher agricultural income for better scrutiny

New Delhi, April 10 : Advocating for stricter scrutiny of income claimed as agricultural income, the Parliamentary Accounts Committee in a report has recommended creating three categories of income of farmers who earn over Rs 10 lakh per year for easier audit. The PAC, chaired by Congress leader Adhir Ranjan Chowdhury, in a report tabled in Parliament in the recently concluded session said audit review of the scrutiny assessments in selected cases during 2008-09 to 2013-14 indicated that in 1,527 (22.5 percent) of the 6,778 scrutiny assessments, the claim of exemption on account of agricultural income was allowed without verification of supporting documents such as the land records, income and expenditure statement, crop information, proof of agricultural income and expenditure such as ledger accounts, bills, invoices etc. The audit scrutiny also revealed that of such 1527 cases, land records were not available in 716 cases (10.6 percent), and proof of agricultural income and expenditure such as ledger etc were not available in 1,270 cases (18.7 percent), the report said. The report referred to the observation of Third Tax Administration reforms Commission Report 2014 which noted that agricultural income of non-agriculturalists is being increasingly used as a conduit to avoid tax and for laundering funds, resulting in leakage to the tune of crores of rupees in revenue annually. “The Committee wants to point out that agriculturists are a heterogeneous category that includes small and marginal farmers as well as corporate houses,” the PAC said. “Therefore the Ministry may look at the possibility of introducing different codes for farmers who have income only from agricultural sources as against those who have income from agriculture as well as non agriculture sources,” it said. The PAC further added, “The Committee therefore recommends that the ministry considers divising a mechanism for categorisation of cases of agricultural income in three slabs – above Rs 10 lakh, above Rs 50 lakh, and Rs 1 crore in CASS so as to better target high risk cases in the aforementioned categories”. As per data quoted in the report, in 2020-21, 21,55,368 taxpayers reported agricultural income in their return of income, out of which 59,707 reported agricultural income over Rs 10 lakh. The Committee also noted that a major chunk of agriculturists are reluctant to file income tax returns due to practical difficulties which relate to lack of awareness, frequency of going to IT offices, etc. “There is also apprehension of farmers that inclusion of their personal details in the Income Tax database may disqualify them from accessing benefits of various government schemes,” they said. The panel said the lack of trust is indicative of lack of trust and a negative perception of the income tax filing procedure. It also said the ministry can take the help of Panchayat or Block administration and NGOs to address these issues. AO ACL0934

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