Time to bring in agricultural income to the tax net

While the recent budget has brought some relief to the income tax payers at the lower income end, it is high time we bring in a radical change in the income tax system by introducing tax on agricultural income. While our vision is to become a “Viksit Bharat” by 2047, we are unfortunately in the wrong company with respect to agricultural income taxation. While countries like US, China, UK, Germany, Canada, Australia, France, Brazil and South Africa tax agricultural income(farmers continue to receive incentives on inputs, some with exemption to small farmers and in some countries exempting agricultural properties from inheritance tax), we are unfortunately in the wrong company of Pakistan, Bangladesh, Nigeria, Kenya, Zambia and Uganda in this matter.

At least to start with tax payers with significant other income and farming not being their core activity, should stop getting exemption for their farm income. It is also perhaps more politically feasible. This will plug a major loophole in the system and brings in more tax equity.