Niti Aayog recommends taxing farmers, Arun Jaitley says no

UPDATE: Giving clarification on the news reports which stated that NITI Aayog has proposed the idea of imposing tax on farm income, the government's think-tank said that "this is neither the view of the Aayog nor is such a recommendation made anywhere in the Draft Action Agenda document as circulated to the Governing Council at the meeting on 23rd April 2017."

Moreover, it said that the views on taxing farm income was expressed by Member Bibek Debroy were personal and not those of the Aayog. 

The clarification came in after Finance Minister Arun Jaitley objected Niti Aayog's proposal to impose tax on agriculture income, Ministry of Finance said. 

Jaitley in a statement said, "I have read the paragraph in Niti Ayog Report entitled 'Income tax on agriculture income'. To obviate any confusion on the subject, I categorically state that the Central Government has no plan to impose any tax on agriculture income. As per the Constitutional Allocation of Powers, the Central Government has no jurisdiction to impose tax on agricultural income."

FM @arunjaitley : I categorically state that the Central Government has no plan to impose any tax on agriculture income .

— Ministry of Finance (@FinMinIndia) April 26, 2017

FM @arunjaitley :As per the Constitutional Allocation of Powers, the Central Govt has no jurisdiction to impose tax on agricultural income.

— Ministry of Finance (@FinMinIndia) April 26, 2017

This is not the first time Jaitley has opposed the decision on imposing tax on farm income. On March 22, he had assured the Parliament saying, "Agriculture income is not taxed and will not be taxed".

Bibek Debroy, member of NITI Aayog on Tuesday had made a strong case for taxing agriculture income, an opinion contrary to the government's stated position, as reported by PTI. 

While briefing the press, Debroy had said, "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."

In addition, the member of the government's top think tank also suggested that exemptions on personal income tax should be removed to increase tax base from the current about 37 million in the country of 1.3 billion of people, the report added.