Finance Minister Arun Jaitley today categorically denied any move by the government to tax farm income as the NITI Aayog distanced itself from the proposal floated by its member Dr Bibek Debroy.

“I have read the paragraph in NITI Aayog report titled ‘Income tax on agriculture income’. To obviate any confusion on the subject, I categorically state that the Central Government has no plan to impose any tax on agriculture income,” Jaitley said in a statement released today. Citing the constitutional allocation of powers, the Finance Minister said the “Central Government has no jurisdiction to impose tax on agricultural income.”

The NITI Aayog also distanced itself from Debroy’s suggestion to bring the farm income under the tax net, saying the views expressed by him were personal. Dr Debroy had yesterday said, “The agricultural income above a certain threshold, which could be the same as in the case of personal income tax, should be taxed. The threshold could be arrived at by taking the average of three or five years’ of income of farmers and also the income fluctuations.” 

The Aayog’s clarification comes after media reports said the NITI Aayog or its draft “Three Years Action Agenda” had recommended that farm income be taxed.

“The NITI Aayog categorically states that this is neither its view nor is such a recommendation made anywhere in the draft agenda document,” the statement added.