1. Big blow for taxpayers, Niti Aayog says retain income tax exemption limit at Rs 2.5 lakh

Big blow for taxpayers, Niti Aayog says retain income tax exemption limit at Rs 2.5 lakh

Niti Aayog today suggested the government should retain the income tax exemption threshold at Rs 2.50 lakh, and take steps to prevent non-farm entities from declaring their earnings as agri income.

By: | New Delhi | Published: August 24, 2017 11:23 PM
Cases of corruption among tax officials “must be prosecuted and disposed swiftly” since without instilling honesty among officials it would not be possible to curb generation of black money. (PTI)

Niti Aayog today suggested the government should retain the income tax exemption threshold at Rs 2.50 lakh, and take steps to prevent non-farm entities from declaring their earnings as agri income. ‘Three Year Action Agenda, 2017-18 to 2019-20’ of the think tank, released by Finance Minister Arun Jatiley, also asked the government to “frontally address” the problem of corruption among tax officials as part of its exercise to curb black money.

Cases of corruption among tax officials “must be prosecuted and disposed swiftly” since without instilling honesty among officials it would not be possible to curb generation of black money. On direct taxes, the 211-page document said that the nominal tax exemption threshold should remain unchanged in a bid to include greater proportion of individuals in the tax net over time.  “We should aggressively move the economy towards greater formalisation, which will lead to greater number of individuals filing the tax returns. This includes moving towards digital payments and away from cash,” it said.

It further said that the government should endeavour to arrest tax evasion when non-agriculture income is declared as agriculture income. The provision of exempting agriculture income from tax is meant to protect farmers, “non-agriculture entities sometimes use it to evade taxes by declaring agriculture as the source of their income. In order to mitigate the generation of black money, the loopholes need to be plugged”.  The document also makes a case for improving tax administration and minimising tax litigations by reducing the scope of interpretation of tax laws.
The Niti Aayog also suggested comprehensive reforms of the anti-competitive regulations as “faulty regulatory policies can have a severe adverse effect on the efficient interplay of market forces and end up harming public interest”.

As regards the Prime Minister’s call for doubling farmers income by 2022, the think tank said the agenda should include measures to raise farm productivity, bring remunerative prices to farmers, put agri land to productive use, and improve implementation of relief measures. The Aayog also makes a case for reform of Agriculture Produce Marketing Committees Act (AMPC Act) and review of the minimum support price (MSP) mechanism.

“MSPs have distorted cropping patterns due to their in certain commodities in selected reasons. There has been excessive focus on procurement of wheat, rice and sugarcane at the expense of other crop such as pulses, oilseeds and coarse grains,” it observed. Such distortions have lead to depletion of water resources, soil degradation and deterioration in water quality in the north-west.

“One measure that can help reduce distortions in the MSP system is the system of price deficiency payment. While MSP may still be used for need based procurement, under the deficiency payments system, a subsidy may be provided to farmers on other targeted produce, contingent on prices falling below an MSP linked threshold,” it said.

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    Prakash Pimparkar
    Aug 26, 2017 at 3:00 pm
    Only well-heeled ed people can think of such a limit or Govt servants with life long pension.How come to the conclusion that Rs 20,000 pm is a good money? Ask them to provide a budget for a family to survive on 20 000.And of not a Govt servant on 10,000 as one has to take care of future and old age. And if to retain same level of status at least 50 should be saved.Now please include these essential expenses in the budget - Food,Shelter ( rent and EMI for own housing ),Clothing,Education ( unless Govt plans to give employment to all uneducated people ),Medicine ( unless Govt promises all facilities and medicine is available in all hospitals in all corners of country),Travel ( unless Govt intends to provide free transport to and from place of work),LTC, Marriage,Familly functions, Vehicle ( if Govt wants to help Auto Industry),Incidentals, Last rites (unless Govt intends to bury or burn all dead free of cost),entertainment ( unless Govt makes all C free) Bribes to Govt officers
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      Raj
      Aug 26, 2017 at 12:43 pm
      Please leave senior citizen from the tax grp on the pension money.Also Modoji should confirm that the tax which are taken from middle class people shoould not go to bada babu's pocket because always middle class are suffering every where every step
      Reply
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        Durgaprasad
        Aug 26, 2017 at 12:32 pm
        Tax law should be modified in such a way that taxation should be proportionate to expenditure with due consideration to the burden of education and medical grounds for those who are dependent on the assessee.
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          Sekhar
          Aug 26, 2017 at 6:23 am
          While agreeing that more individuals would come into tsx bracket niti ayog members i believe most of them are not senior citizens have forgotten that senior citizens most of them live on interest income from savings during their past and taxing their income without increasing the base limit would be injustice in this era when seniors are left alone to live on their own by their wards.mr FM himself a senior citizen should appreciate the plight of seniors in india and think of reducing the burden of tax on them
          Reply
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            Prakash Pimparkar
            Aug 26, 2017 at 3:05 pm
            Even at 1 no problem keep 100 crore in SB/FD account that's all ! crore should be enough to leave a no frill life
            Reply
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            Ravindranath Shetty
            Aug 25, 2017 at 1:25 pm
            Income tax need to be charged even for large farmers. High end farmers are enjoying the tax exemption benefits. But poor pensioners are penalized .
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              Ramakrishna
              Aug 25, 2017 at 9:12 am
              Political parties and big business mans subsidy and more exemption but we working public and private companies workers nothing after 60 years retirement.
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                RK
                Aug 24, 2017 at 11:50 pm
                Tell them to pay from their own hard earned money , then only they will know how it pains. A struggling to survive Indian in India.
                Reply
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