NITI member Bibek Debroy suggests to tax agriculture income

The Dollar Business Bureau

Member of NITI Aayog and noted economist, Bibek Debroy on Tuesday made a strong case to tax agriculture income, a view contrary to the specified position of the government.

Moreover, the government's think tank member also suggested removing exemptions on the personal income tax for increasing the tax base from around 37 million in 1.3 billion population.

“On expanding the base on the personal income tax side, other than elimination of exemptions, is to also tax rural sector, including agriculture income above certain threshold,” he told reporters in a press conference.

The taxation on rural sector is a politically sensitive matter and the successive governments have abstained from imposition tax on agriculture income.

Recently on March 22, Finance Minister Arun Jaitley had given assurance to the Parliament that “income from agriculture will not be taxed”.

On the question about the threshold of levying tax on agriculture income, Debroy said that the tax can be decided after considering the average income for either 3 years or 5 years.

“At best what I can do because it is an agriculture income, instead of using agriculture income for one particular year, what I could do is I average it over three-year period or may over five years period as agriculture income is subject to annual fluctuations, barring that threshold should be the same,” he said.

Arvind Panagariya, Vice-Chairman, NITI Aayog, who was also present at the press conference, refrained from replying any question on agriculture income taxation.

In May last year, Prime Minister's Office (PMO) had directed the NITI Aayog to make documents on 3-Year Action Agenda, 7-Year Strategy and 15-Year Vision.