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26 April 2017
Noted
economist and NITI Aayog member Bibek Debroy on Tuesday said there was a need
to expand the tax base by bringing agricultural income under the tax ambit.
He said there was also a need to eliminate
exemptions on personal income tax.
Talking to reporters here, Debroy said
while the exemptions on personal income tax need to go, the "eventual
answer to expand the tax base is to tax the rural sector, including
agricultural income above a certain threshold. The Total Investment & Insurance Solutions
"While only the agricultural income
of farmers is exempt from taxation, their non-agricultural income also goes
un-taxed," he said.
Asked what should be the threshold for
taxing agricultural income, Debroy said it should be same as in the urban
areas.
"I don't believe in the artificial
rural-urban distinctions. So whatever is the threshold of personal income tax
in urban areas should be for the rural areas as well.
"At best, what (we) can do is --
because it is agricultural income -- (we) can average it out over a three- or a
five-year period instead of using income from one particular year... because
agricultural income is subject to annual fluctuations," Debroy said. The Total Investment & Insurance
Solutions
"Barring that, the threshold should
be the same."
During the press conference, NITI
(National Institution for Transforming India) Aayog Vice Chairman Arvind
Panagariya shared details of the draft three-year action plan proposed to
replace the erstwhile Five-Year Plans.
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Panagariya said that over the next three
years, there was a need to tackle tax evasion, expand the tax base and simplify
the tax system through reforms.The
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