Bring agriculture income under tax net: NITI Aayog member Bibek Debroy

Bibek Debroy says farmers should pay income tax in line with urban dwellers

NITI Aayog member Bibek Debroy on Tuesday made a strong case for removal of exemptions on personal income tax and bringing agriculture under the tax net with a view to increasing the resources of the state.

The effort, he said, would widen the tax base and more funds could be made available for the social sector schemes.

"On the personal income tax side also exemption should go ... 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," Debroy said in a press conference.

On the threshold of imposing income tax on rural sector, he said it could be decided after taking into account the average income of either three years or five years.

"I don't believe in artificial distinction of rural and urban, so whatever is the threshold on personal income side on urban side, should be the exactly same on rural side.

"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.