New Delhi
If you are saving income tax incorrectly in the name of farming, then action can be taken against you. The Income Tax Department (IT Department) is investigating those who are wrongly saving income tax in the name of farming. Let us know that the income tax and GST are not imposed on the income of farming.
In fact, for many decades, farming income and selling land have been used to white money and save tax. Now the Income Tax Department is investigating all over the country. There have been cases in many states where people and companies have shown income of Rs 50 lakh or more without land.
Which cases of the department are monitored?
The Income Tax Department is also monitoring many such cases where fake farming of Rs 5 lakh per acre has been shown. These figures do not match the common trend and government figures at all. If the department investigates the matter deeply, then there may be a ruckus in many places. Because many big leaders and influential people are directly or indirectly the owner of the land. This investigation can create difficulties for them.
Investigation started from Jaipur
According to the Economic Times, this investigation has started from some cases in Jaipur. In these cases, some people showed the income of more than Rs 50 lakh in their income tax return. In these cases identified as ‘high-risk case’, the department will investigate the claims of tax paying. These cases are of 2020-21.
Ashish Karundia, founder of Ashish Karundia & Company, says that those who have identified the Income Tax Department will have to prove that they have used their land for farming. Especially when farming has been investigated with satellite image earlier.
These are not involved in income
Plotting and sales of land, selling city land, rented farmhouse for commercial use, poultry farming and income from other similar activities are not involved in income from farming. Tax will have to be paid on this. If someone has sold their non-low land at a lower price than stamp duty value, then they can also be taxed.
It may include
Farming income may include earnings or land fare from selling crops. This land should be out of the municipal limits and should be in the area with minimum population fixed in the law. Profits from selling farming land can also be released from tax. This will happen when the land does not fall into the definition of ‘Capital Asset’ in Section 2 (14) (III) of the Income Tax Act, 1961.
Tax in these cases
For identification as ‘capital asset’, cultivated land can be both village or urban. When the land of the village is sold, it does not cost a capital gains tax. But selling urban cultivated land leads to capital gains tax. Not only farmers, but other people also buy farming land. They use it for other works.
For this, the required approvals and fees have to be paid. Evidence of farming yield can be shown in case of farming income. But if someone has so much income for which there is no evidence of yield or sales, then it can be fined for incorrectly relaxation.
