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What rocked Rajya Sabha: Agri income worth 16 times India's GDP

Charu Kartikeya | Updated on: 14 February 2017, 5:56 IST

Members of the Opposition in Rajya Sabha on Tuesday pointed out to what can be tax evasion of shocking proportions, related to agricultural income.

Income worth Rs 2,000 lakh crores was being passed off as agricultural income, which doesn't attract any tax, Janata Dal (United) chief Sharad Yadav said in the House, referring to a report aired by News Nation.

To put the figure into perspective: India's gross domestic product was only Rs 126 lakh crore in 2013.

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Yadav said he was quoting the figure with regret as it was too shocking to be mentioned without verification. Nevertheless, it indicates the magnitude of serious irregularities in the name of farmers.

Bahujan Samaj Party supremo Mayawati, Samajwadi Party leader Ram Gopal Yadav and Communist Party of India (Marxist)'s Tapan Sen supported him and sought government action.

At the same time Sharad and Ram Gopal urged the government to not use it as a pretext to impose income tax on small and marginal farmers. The Centre should only catch defaulters and act against them. Opposition leaders also requested the Chair to ask the government to respond.

What is the issue essentially?

The report cited by Sharad Yadav is based on a Right to Information query and an internal communication of Central Board of Direct Taxes (CBDT). According to them, some 6.5 lakh farmers in India earned Rs 2,000 lakh crore in 2011-12.

The CBDT's internal letter reportedly asked officials to verify the genuineness of agricultural income claims exceeding Rs 1 crore made by taxpayers in their income-tax (I-T) returns.

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The CBDT noticed several taxpayers, over the years, have declared significant agricultural income exempt from tax.

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The board reportedly took cognisance of the issue after it was highlighted by a public interest litigation at Patna High Court stating agricultural income was often used as a conduit for money laundering.

Govt: Will take action, don't cry victimisation then

Finance Minister Arun Jaitley, also the Leader of the House, assuring that imposing income tax on agricultural income was not on the government's agenda. He announced that individuals who misused agriculture to disguise income and evade tax were being investigated.

He informed the House that such individuals were "very prominent people" and said the Opposition must not claim political victimisation when details of the probe come out.

At this, Congress leader Digvijay Singh challenged Jaitley's hint that Opposition leaders could be involved in this alleged scam. He said Jaitley earlier misled the country on black money account holders in foreign banks by not disclosing names and was again misleading the country now. He challenged the minister to disclose the names and not threaten the Opposition.

Edited by Joyjeet Das

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First published: 15 March 2016, 4:14 IST
Charu Kartikeya @CharuKeya

Assistant Editor at Catch, Charu enjoys covering politics and uncovering politicians. Of nine years in journalism, he spent six happily covering Parliament and parliamentarians at Lok Sabha TV and the other three as news anchor at Doordarshan News. A Royal Enfield enthusiast, he dreams of having enough time to roar away towards Ladakh, but for the moment the only miles he's covering are the 20-km stretch between home and work.