The Central Board of Direct Taxes (CBDT) has detected several cases in which taxpayers claimed exemption on agricultural income despite declaring no land holdings, according to a report by the Times of India.
Using data analytics tools, tax authorities identified more than 300 suspicious cases where individuals claimed tax-exempt agricultural income ranging from Rs 50 lakh to as high as Rs 400 crore, even though the size of land declared by them was shown as zero.
Officials said that in 310 such cases, the total amount of exemption claimed amounted to Rs 2,038 crore, representing significant tax revenue foregone by the government.
Investigations by the Income Tax Department revealed multiple methods allegedly used to make “non-genuine” agricultural income claims. In several cases, capital gains arising from land sales were reportedly passed off as agricultural income to avoid taxation. Officials found instances where land sold to real estate developers was falsely projected as farm-related earnings.
Authorities also uncovered cases where undisclosed income was shown as agricultural income in income tax returns. According to officials, this was allegedly done not only to evade taxes but also to legitimise unaccounted or black money. In some cases, income from allied or unrelated activities was also classified as agricultural income to claim tax exemptions.
The probe further found cases where there was no documentary evidence to establish any farming activity. In other instances, the income declared was disproportionately high compared to the size of land holdings.
The investigation was carried out under the tax department’s SAKSHAM initiative, which uses advanced data analytics to identify anomalies in tax filings. Officials examined returns with unusually high agricultural income claims and cross-verified them using multiple data sources.
Satellite imagery and mapping tools were also used in certain cases to verify agricultural activity and monitor crop patterns on land for which exemptions were claimed.
The data analysed covered returns filed from assessment year 2021-22 to assessment year 2023-24. Based on its findings, the department is urging taxpayers to revise or update their returns and pay taxes wherever applicable.
Officials clarified that there is no proposal to withdraw tax exemptions available to genuine farmers or small cultivators. The focus, they said, is on preventing large-scale misuse of agricultural income provisions by high-value taxpayers making false claims.
Source from: https://economictimes.indiatimes.com/news/india/farmers-without-farms-cbdt-finds-taxpayers-claiming-up-to-rs-400-crore-farm-income-with-zero-land/articleshow/131258603.cms?
