Worried about possible mis-reporting and evasion, income-tax authorities plan to check the veracity of high agriculture incomes claimed by assessees in their returns.
“It has been noticed that several assessees have declared income from agriculture of more than ₹1 crore in the income-tax returns filed for earlier years, especially from assessment years 2011-12 to 2013-14,” said the Central Board of Direct Taxes in a recent letter to field formations.
According to data with the tax department, 2,746 cases showing agriculture income of over ₹1 crore were found between the assessment years 2007-08 and 2015-16. Of these, 1,080 cases are from assessment years 2011-12 to 2013-14.
Finance Minister Arun Jaitley indicated in Parliament on Tuesday that many prominent people are being probed for allegedly concealing taxable income as agricultural earnings.
The Board noted that agriculture income is used only for rate purposes and in some high-value cases taxpayers may have filled up the wrong fields in the income-tax returns.
It has asked assessing officers to check whether the taxpayer made a data entry mistake while filling up the return. In cases where the assessment has been completed, it has asked assessing officers to check the records.
In cases where scrutiny proceedings under Section 143(3) of the Income-Tax Act are under way, the CBDT has said that assessing officers must verify the claims thoroughly.
It has sought a full report on such claims by March 20 in order to provide the correct figures to the Patna High Court, where a Public Interest Litigation (PIL) is pending on the issue.
In the PIL, concerns have been raised that a few assessees may be passing off their unaccounted or illegal money asagricultural income, thereby not only claiming exemptions on such income but also engaging in money laundering, said the CBDT.
Agriculture income is exempt from tax, but is used for rate purpose while computing tax liability if an individual’s non-agriculture income is above the tax threshold.
Refer: http://www.thehindubusinessline.com