Dodging tax by passing off earnings as agricultural income is set to get tougher as robust checks are being introduced, the government has told Parliament’s Public Accounts Committee, which pointed to several lapses in granting blanket exemptions.Super-rich farmers will face stricter scrutiny by tax authorities, who will comb through details of agricultural income — tax-free under the law — in jurisdictions where farm income exceeds a threshold of ?10 lakh a year, the finance ministry said in a response to questions to the parliamentary committee. In about 22.5% of cases, authorities approved tax-free claims without proper assessment and verification of documents, allowing scope for evasion of taxes, the committee said.The panel released its 49th report, “Assessment related to Agricultural Income” on Tuesday. It is based on a report by the Auditor and Comptroller General of India. One such case involved tax exemption of farm income of ?1.09 crore as proceeds from the sale of farmland in Chhattisgarh.
