Govt. has no plans to Tax on Agricultural Income
In the month of April 2017, NITI Aayog member Bibek Debroy stated that farmers should be liable to pay tax on their incomes at par with other citizens after seasonal fluctuations are adjusted.
In the contradiction of above, Finance Minister Arun Jaitley has said the government has no plans to tax agricultural income, including that of prosperous farmers, saying a rich farmer is “a very rare institution” and not the norm. He also stated agriculture sector is in distress and there is no question of taxing agricultural income. He further added, “The rich farmer is a very rare institution. It is not the norm. It is only a rare exception and therefore, at a time when you need to support agriculture because of the distress, this is hardly the time to deflect the issue and start taxing agriculture. This is not the time. They are under distress”.
On the ordinance promulgated last week to enable the RBI to order lenders to initiate insolvency proceedings against defaulters and create committees to advise banks on recovering non-performing loans, Jaitley said NPA resolution will take time but the process has to be expeditiously started now by the banks.
Finance Minister Arun Jaitley said “Now the next stage is that through the JLF (Joint Lenders Forum) mechanism, the resolutions should start and we do expect the banks to cooperate in making the JLF mechanism a success”. [The mechanism of JLF, or the joint lending forum, came into effect in 2014 with the intention of recognising stressed assets early and coming up with a corrective action plan (CAP) within 45 days.]
The system, however, did not work seamlessly as there were disagreements between lenders on how to move forward on individual accounts. Jaitley said equity in public sector banks can be brought down only at a time when the value is there for the government to do so.